I've been advised that your group may have an interest in participating in
the discussion of telecommunications access issues.
Use by competitors of Telstra's Customer Access Network (CAN) became a
major issue at the ATUG '98 conference. During the AIG/PFRF [ATM Interest
Group / Pacific Frame Relay Forum] User Q&A session, a call to action was
made to form an Access Issues Committee within ATUG. ATUG NSW will hold a
Special Interest Presentation on Local Access. It will be held on Tuesday
26th May 1998 from 4.00 p.m. to 5:30 p.m. in the 27th floor auditorium, the
KPMG Centre, 45 Clarence Street, Sydney and will be followed by light
refreshments.
You are coordially invited to attend.
The presentation agenda follows:
1. Chris Pattas, head of the current ACCC enquiry into local access, will
discuss the major issues identified by his enquiry and will talk briefly on
the three ACCC draft reports on Digital Data Access services, ISDN and
Transmission capacity. (30 minutes)
2. Shara Evans, President of the Pacific Frame Relay Forum (PFRF) will
provide insight into the sorts of products, services and resulting benefits
end users could expect if providers had access to the CAN at cost related
prices. (30 minutes)
*** Note: I am soliciting your input for this presentation!
3. Q&A /Discussion (30 minutes)
With regards,
Shara Evans
Manging Director
Telsyte
(02)9417-7609
===================================================
A number of people have expressed interest in forming an interim working group
(via email) to exchange ideas on this topic. If you are interested in
participating
in the email dialogue, drop me a note with your contact details. I will
then circulate
a message advising of interested parties.
It has also been brought to my attention that access-related
issues are being discussed in conjunction with Senate hearings on the Telstra
Privatisation Bill. See
http://www.aph.gov.au/senate/committee/advert/telstra.htm
The hearings are 99% finished, but written submissions on the bill will be
accepted
until Friday 15 May. Comments should be directed to Roxanne Le Grue -
the Secretary running the current Senate Inquiry into the further sale of
Telstra.
Roxanne can be reached at the following email address:
erca.sen@aph.gov.au
The ACCC is seeking feedback on the following documents:
1. A Declaration of Local Telecommunications Services - Discussion Paper -
April 1998
2. Competition in Data Markets - The Digital Data Acess Service - May 1998
3. Competition in Data Markets - Declaration of ISDN Services - May 1998
These documents are available on the ACCC website under Telecommunications.
See http://www.accc.gov.au/
I look forward to hearing from you.
Sincerely yours,
Shara Evans
===============================================
The following is an edited version of a three-way conversation (Russell
Ashdown, Stewart Fist, Stephen Coates) on access issues. The discussion
was held last week. Enjoy.
Shara
============================================
! Indicates commentary from Stephen Coates
# Indicates commentary from Stewart Fist
Comments without a prefix are from Russell Ashdown
! I wholeheartedly agree with the thrust of Stewart's proposal to break up
! Telstra horizontally, separating the local loop (and, presumably the
basic
! switching function) from the carriage and all value added services.
# No. You misunderstand my proposal. I want to create a
# cable-leasing company that has no vested interests in
# anything other than hiring the cable. It is not remotely
# concerned with the switching or information type or
# content, and it rents cables by the year.
# This is the key to the whole proposal. As soon as you
# have a local phone company (with switching and
# call-billing capacity) then you have a monpoly middleman
# in the supply chain between the customer and the service
# provider/long-distance carrier.
#
# So a local telephone company (along the lines of the
# RBOCs) holds the key to network power - and therefore to
# riches, and standards, and all those things.
Well Steve, I also agree with Stewart. The Lines
Organisation MUST be prohibited by law from entering the
exchange or switching markets. They may not even hold
Shares in a switching company at arms length. Anything
short of this will mean the certain emergence of another
"Son of Telstra" (I must go and see that new Godzilla movie
<grin>)
#
! Exactly where to draw the line and whether the exchange, number and such
! services as call waiting are to be included with the local loop are
details
! that, although not covered, are not significant in the scheme of
! things.
#
#
# I don't agree. I think the demarcation point is crucial.
# As a customer, I must control my own exclusive-use access
# link to the physical location of the market-place.
#
# So the market-place (the place where competitors have
# their Point-of-Presence) must be in the local exchange -
# otherwise, I will only be able to reach my competitive
# carrier, or high-level service providers, through the
# local carrier's switched network - which is why he is a
# middleman, able to exert such power.
#
# In America they created the structural separation between
# the local and long-distance carriers. This was partly
# successful, but it still left the RBOCs in control. The
# separation must be between the customer-controlled part of
# the network (the local loop) and the shared parts
# (switches & fibre) and electronic information-supply
# equipment (in the local exchange)
#
The exchange and switch company which leases exchange
floor space will decide what services they will provision
their switches for. Some may implement decadic dialling
for instance. Others may only offer ISDN with every bell
and whistle. Others will probably offer the entire
spectrum in between. It is important to keep the local
loop as just that: A piece of copper (or maybe fibre?)
wire.
#
! The entire network was a natural monopoly when exchange equipment lacked
! the means to feasibly and inexpensively provide the means to select
between
! different carriers and/or service providers. This is clearly no
longer the
! case and the argument that the network as a whole remains a natural
! monopoly is no longer valid.
#
# Agreed. But nor are a computer functions a natural
# monopoly - we have a choice of applications, a choice of
# processors, etc. So, as with Microsoft's Window O/S, it
# is not the whole - but the key element of the system -
# which exerts the monopoly controls.
#
# The Local loop is as much a key-monopoly component in the
# telephone network
# as the Windows O/S is in computer functions.
#
Deep...
#
! The USA situation until about 1996 was the closest approximation of the
! model Stewart is proposing of which I am aware. Local phone service
there,
! and to a lesser extent also in Canada, has been provided by a large
number
! of very small companies, most privately owned, some local government
! owned. Other local operators were subsidiaries of AT&T (now the
seven Bell
! Operating companies) and GTE.
#
# I completely reject the US model for reasons outlined
# above. If you look at Finland, you see something similar,
# but there the smaller companies were never consolidated
# into RBOCs (except within Helsinki, and then only
# recently). So Finland had 182 small local phone
# companies, that shared ownership of a cooperative
# long-line organisation called Finnet.
#
# Telecom Finland (government owned) was a long-line
# competitor to Finnet, and it is now using wireless in the
# local loop to provide competition to the small local call
# monopolies.
#
# This system works reasonably well, mainly because neither
# of the long-line companies is predominantly operated for
# profit. Many of the local companies are local
# cooperatives also.
#
# I think this is a good model, but not one that Australia
# can implement now.
#
Hmmm...
#
#
! The difference is that these local companies could not until 1996,
provide
! long distance carriage outside their local transport area (LATA), but
had a
! monopoly within. The segmentation was one of scale - the local
! companies had a local and short long distance monopoly and the long
distance
! carriers competed for longer long distance and international
carriage. Stewart is
! proposing that the monopoly be restricted basically to the local loop and
! that services between and beyond be open to competition.
#
# I'm not saying "monopoly [should] be restricted to the
# local loop" - that is taking a legislative or regulatory
# stance. I am saying that the local loop is not seriously
# being challenged by interactive cable systems or wireless
# in the local loop, despite all the hype. Neither of these
# technologies can ever match copper wire twisted pair in
# terms of reliability, simplicity, price, maintenance-free,
# or (taken over time) in bandwidth.
#
# So I am saying that the local loop is a logical monopoly -
# no country in its right mind would duplicated it - so it
# is this that gives it its economic power. Therefore ... it
# needs to be kept out of the hands of people seeking to
# profit from it money wise (and that includes a) carriers b)
# governments which see it as a tax gatherer, and c)
# shareholders looking for profit.
#
# The value of the local councils owning joint shares in
# such a regional cable company, is that their incentives
# would be to develop higher-level and competitive services,
# rather than restrict them to benefit themselves. Some
# regions might decide later to lay multiple thin-coax in
# the ducts, or put in fibre to the home - to promote their
# own area as an IT development centre (like the Malaysian
# Super Corridor). But this can't happen when Telstra runs
# the local loop for the country as a whole (every country
# town would demand the same treatment), whereas on a
# regional basis it is up to the councils - who may decide
# to fund such upgrades out of rates, just to create
# business opportunities.
#
# The whole character of the telephone network will then
# change. It will be seen as only one part of many national
# information distribution systems - each having access to
# customers over the local loop.
#
# I would be among the first to buy a pair of four-channel
# multiplexers at my local Dick Smith store, and have one
# installed at each end of my rented twisted pair. Then I'd
# make a connection to both an Optus and a Telstra switch at
# 64kb/s, link a third permanently to my ISP's POP at, say
# 128kb/s, and have a fourth available for security and
# health monitoring service run by some local company.
#
Whether it is local governments, state governments, Rupert
Murdoch, the local cabling company, the local power
company, the local gas company or anyone else for that
matter: It doesn't concern me so long as they don't hold
shares in a carrier or exchange/switching company (I guess
that rules out Rupert <grin> and also the various State
Governments).
#
! The underlying logic is beyond question - the local loop is a natural
! monopoly and all services beyond are not. I fully support this
horizontal
! breakup as he has proposed.
#
# Great. I'm sure you would. However, politically, it is
# vitally important to stress the difference between
# creating new local telephone companies (not on with either
# Party) and splitting the copper off into cable companies.
>
Couldn't agree more!
#
! The second premise that Stewart argues, that no one body can be a
! competitive provider and at the same time the operator/owner of the
! local loop, is supported by a plethora of examples where Telstra has
frustrated
! and inconvenienced competitors - the case of PAPLs as reported in April's
! Australian Communications only the latest in a long saga.
!
! It could be argued, and indeed has been, that effective regulation
prevents
! Telstra engaging in anti-competitive behaviour. Yet Telstra, as do
Telecom
! NZ and presumably other former monopolies, probably have a body of staff
! equal in size to that of their marketing department, finding ways to get
! around the various legislative and other regulations established to
prevent
! such behaviour.
#
# I think we've got to fight against the ideas that the same
# can be achieved by accounting separation (so-called
# unbundling local loop costs), or by China Wall separations
# of the local line group within Telstra, from its other
# divisions. This is all theoretical bullshit - it never
# works.
>
Hear, hear <big smile>
#
! I thus also support the separation of local loop from competitive
! services.
!
! Stewart's third argument is that the local loop be operated by a moderate
! number of regional operators and that these be operated by local
! governments.
#
# No I don't think these will be 'operated' by local
# governments. Just owned.
#
# I just want the final ownership of the cables to be in the
# hands of a non-profit organisation - dedicated to
# regional, rather than national, interests.
#
# I think you would have a Sydney Cable Company with
# probably twenty local councils holding the shares (in
# proportion to the lines in their region). You'd probably
# have a Western Sydney Cable Company also, with a similar
# number. Then you'd have a Albury-Wodonga Riverina Cable
# Co. across both state borders and shire borders.
#
# This would effectively keep individual councils from
# interfering with the cable operations, while maintaining
# the regional-development emphasis. It's the way a lot of
# water-supplies work also around the world - and it seems
# to be effective.
>
Now, guys, lets be realistic. Non-profit, Not-for-profit,
Local Government, State Government? These are all
contradictory terms. Personally, I'd like Telstra and
Optus et al to operate in not-for-profit mode. Only then
will we ever realise the single rate STD call that Stewart
keeps talking about (oh, by the way Stewart, I agree with
your figures and I subscribe to the premise) but we are
dealing with rampant capitalism here - whatever the market
will sustain is the going price.
#
! First, the separation.
! In principle, I support the idea of separation of local loop
operations and
! allocation to a number of regional operators. Such operators would
be more
! responsive to the needs of the local region and would probably be able to
! make decisions much faster than a national operator.
#
# Agreed. They would also train local electricians to
# provide back-up when telephone lines go down, and have a
# local pool of maintenance staff capable of keeping the
# poles standing, etc. This is one of the values of having
# the local councils involved - they do this sort of work
# anyway. Most maintenance of the local loop is in planting
# poles (in the country) and digging trenches in the city.
# Councils working under contract back to the cable company,
# could do this work.
>
Anyone with an appropriate ACA license should be able to do
lines work in much the same way that that operates with
building block cabling. Don't forget power companies, they
actually plant more poles than Telstra. Telstra get to use
them as part of the shared use policy.
#
! It does, though,
! raise the issue of cross-subsidisation. What would be the cost of a
local
! loop in the NW of Western Australia compared to suburban Melbourne? How
! would some means of cross-subsidisation be implemented? Not an
! insurmountable problem, but one that would have to be considered.
!
! Now, local governments. Stewart has a faith in local government that
I do
! not share.
#
# No I don't. I think they are bloody awful in many cases
# - although we only hear of the worst ones in the Inner City
# where development applications and payoffs makes them
# corrupt. But may of the regional and shire councils do a
# good job - and are certainly as trustworthy as State and
# Federal Governments who are more removed from the
# customers being serviced.
#
I too have a concern for "the bush". I think that the
issues of lines in "the bush" needs to be dealt with
sensitively and cautiously. There needs to be service
guarantees, etc. Maybe the carriers could be levied to
underwrite bush cabling from long distance profits (I know
you're going to love that one Stewart!).
#
! Have you seen the film Rats in the Ranks? Would you trust
! provision of the local loop to people such as these? Suppose a council
! that opposed a development that was passed by the Land & Environment
Court
! refused to supply local loop to that development. The Sutherland Shire
! Council has long objected to the existence of the ANSTO facility at Lucas
! Heights. Suppose it refused to supply local loop or took as long as sea
! turtle's lifespan to provide it.
#
# That's why having a regional cable company would stop such
# activity. I am not recommending that each council own its
# own cables. And don't forget that existing USO
# regulations and normal ACCC regulations would come into
# play here also.
#
I saw "Rats in the ranks" and I wouldn't trust the local
councils to pick up the rubbish if there was a political
point to be scored from it. No, I'm basically a capitalist
at heart, that is why I run my own small business. I do
believe that given time, small business and medium business
could get their respective acts together and run exchange
buildings and cable plant, in much the same way as the Post
Office has been tendered out.
#
! Local governments all have their agendas and giving them the
responsibility
! to provide and operate local loops with the unintended by unavoidable
! consequence that they can withhold or delay service is worse than leaving
! it with Telstra.
#
# Don't agree. I can't imagine any situation where a local
# council could or would exert such power.
#
Oh ho ho ho. What!? I can. And I only thought about it
for a short while. If I take any longer, I would be typing
for half the night.
>
! Whether or not this is Stewart's thinking I will not speculate, but one
! thread to the argument of most who oppose privatisation is that
! government-owned organisations all have an internal ethos of "we're
! owned by the government, therefore we must do the right thing by the
! community".
#
! Nothing could be further from the truth. Telstra's list of sins
including
! the infamous COT cases long pre-date is partial privatisation.
#
# I think you are mixing up two things here. Telstra was
# 'corporatised' in the 1980s, and told to go out and act
# like a private profit-making company - and its executives
# and its activities became judged on the profits it could
# generate. It even imported American executives who were
# marketing- and finance-oriented, rather than engineering.
#
# So it began to do what all large monolithic private
# companies do - rip off
# people and make money. Governments have been ripping
# billions out for years - mostly hidden behind special
# discounts, and defence/custom operations.
#
No, I don't read that into Stewart's dialogue.
#
! There is a further argument against Stewart's last point and in favour of
! full privatisation. An extension of the above notion that
government-owned
! organisations have an ethos of ethical behaviour leads to the perception
! that they don't really have to be regulated that stringently. If Telstra
! was fully privatised, whether broken up as Stewart has proposed or
not, the
! onus would be on the government to fully regulate its behaviour. The
! regulations would be public and so would the compliance metrics.
#
# I think you are wrong here. The Liberals are committed to
# 'deregulation' in the sense of removing the
# industry-specific regulators. They believe that Telstra
# can be controlled as a private monopoly (and they know it
# will continue to be) by some sort of ACCC trade-practices
# act. Yet this has failed dismally in New Zealand.
#
Frightening, really.
>
! Imagine the ACA and ACCC trying to regulate 1,000 local government
! owned local loop operators, not forgetting that local government is,
! constitutionally, a state government matter. [There is a precedence.
! Canada's CRTC has been prevented by court action from regulating two
! provincial-government owned telephone companies.] And if this regulation
! was hobbled because local government is, after all, government, it
would be
! as effective as a lawn mower on artificial turf!
!
! Finally, to answer your question, you could a) contact your local MP,
! b) Email Richard Alston, c) spend an hour on the net waiting for the
Senate
! Committees and contacts to come up or d) call Parliament House, ask for
! Roxanne Le Grue (02 62777111) and go from there.
!
! You've prompted me and I will be making a submission, advancing the above
! argument, but not in the form of a commentary on Stewart's.
#
# I think you are wasting your time e-mailing Alston. Talk
# to local MPs by all means, but better still lobby the
# Senate Inquiry and/or individual senators on that
# committee
#
# Sen Chris Schacht - fax 08 8344 9355,
# Sen Kate Lundy fax 02 6230 0413,
# Sen Vicki Bourne fax 02 9247 9681)
#
# or to a couple of Liberals who have an interest, and tend
# to speak out like
#
# Sen David MacGibbon fax 07 3229 8954 (Not on the committee
# but a stirrer) Sen Alan Eggleston fax 08 9325 4354.
#
# Also Sen Brian Harradine of course on fax 03 6234 5865.
# (not on this committee) Green Senator Dee Margetts fax 08
# 9470 4098 has an interest also and is on the committee.
# ---------------------------------
>
Well, I did it, I faxed the lot of them. On company
letterhead even! I will be interested to see the outcome.
#
# I think it is important that we don't get into arguments
# about what form the control over the local loop should
# take, and I do understand the reservations about local
# government involvement - but I think it mainly arises from
# a misunderstanding about what I have proposed (although
# much of this could be generated by my over-simplification
# in talking to people).
#
# We need to get these messages across:
# 1. The control of the local loop is the key to economic
# dominance of the network - so there must be structural
# separation of control if competition is to come into the
# network and future information industries.
>
Absolutely!
#
# 2. It is arguable about where this control should be
# vested - but there is total unanimity that it should be in
# a cable company (not a telephone company), which has no
# financial interests in any of the competitive carriage or
# information-provision services. Accounting separation is
# not good enough.
#
Even more Absolutely!
#
# 3. Cable access should be rented to the customer on a
# yearly basis, and the customer can control the provision
# of multiplexers (or whatever) on each end of the cable.
# The customer then gets to use the cable for any purposes
# he/she sees fit - provided, of course, that such use
# doesn't interfere with other wires in the duct.(conformity
# to EMI standards)
#
Hmmmm need to maintain electrical safety and not blow up
exchange equipment. Caution here! But generally agree in
principle.
#
# 4. The local exchange building should also be owned by the
# cable company, and space should be made available freely
# to any competitive carrier or licensed service provider.
# Anyone with a ACA license (using licensed technicians)
# should be able to rent space, provide racks, add
# electronics and make connections to any customer or other
# supplier, as required.
#
Ahhh, you've been listening to me drone on about this.
I've held this view for some (long) time now. Its the ONLY
way it can realistically work!
#
# 5. Such access in the exchange, should be made available
# to all, at the same price. It must not be in the
# cable-company's power to manipulate prices to benefit
# supplier.
#
Agreed!
*************************************************************************
Shara Evans Phone: +61-2-9417-7609
Managing Director Fax: +61-2-9417-7320
Telsyte Mobile: +61-416-258-462
134 Deepwater Road Email: shara @telsyte.com.au
Castle Cove NSW 2069
Australia