Telstra's copper must be in NBN deal

Telstra has agreed to let NBN Co use its pits and ducts for rollout of the National Broadband Network in NBN's currently stalled second-release sites – but full rollout of the network will have to await the delayed vote by Telstra shareholders on the Government's proposed $11 billion deal with the carrier, NBN Co chief executive Mike Quigley told a parliamentary inquiry yesterday.

Work on the second-release sites was stalled last month after NBN Co indefinitely suspended construction contracts for its second-release sites, accusing all 14 tenderers of padding their tender pricing.

On the pits and ducts deal, Quigley said: "We've done a lot of preparatory work ... but we really cannot press the final go button on volume until we have that deal finalised."

He said that to proceed without the deal in place would end up costing the Government a lot more. If the deal goes ahead, he said: "We have available to us an enormous number of facilities. Huge facilities in terms of underground ducts, exchange facilities and backhaul facilities.

It is quite incredible, mind boggling really, that a government would pay a private company $9 billion to decommission a network asset but not reserve for itself, as part of the deal, the right to use as much of that network as it chose," he said.

"But that's the real world — and unless there is a change of direction on the part of the government, the Telstra/NBN deal will not simply deliver Telstra a $9 billion windfall but in addition set Telstra up to receive more billions when inevitably a future government, Liberal or Labor, seeks to redesign the network topography in a way that reduces the crippling capital cost of the fibre-to-the-home design without compromising the promise of universal very fast broadband."

Turnbull cited a technology white paper by Quigley's former employer Alcatel-Lucent that said high speeds could be delivered over a fibre-to-the-node approach, but it would cost up to 50 per cent less than a fibre-to-the-home network. Turnbull said that it is now up to Communications Minister Stephen Conroy to ensure that the copper network is included in the Telstra deal.

19 new second-release sites include Bacchus Marsh and South Morang in Victoria; inner north Brisbane, Springfield Lakes and Toowoomba in Queensland; Riverstone and Coffs Harbour in NSW; Modbury and Prospect in SA; Victoria Park, Geraldton, and Mandurah in WA; Casuarina in the Northern Territory; and Gungahlin in the ACT.

Grilled about allegations of corruption in Costa Rica during his term as a top executive at Alcatel, Quigley reiterated that he had no knowledge of what had gone on, and had never been questioned over the matter by US authorities. He apologised for having previously stated he was not responsible for operations in Costa Rica, after learning that for a period in 2001-03 he was.