The current debacle in Australia regarding the National Broadband Network (NBN) and Telstra Universal Service Obligation (USO) is becoming bigger news insofar as the ramifications of undermining Telstras monopoly are becoming more apparent beyond parliament. In recent times Telstra has been nearly fully privatised (the 2009 share dump leaves government ownership at about 10%) and as it is no longer a public asset it must turn a profit to succeed. Unfortunately Telstra owns the millions of dollars worth of copper in the ground and have put it off limits to the NBN. The government can’t afford to buy it back and are hence forced to run fiber-optics to the home and this makes the NBN much more expensive. Then again, it also allows the final top data rates to be much higher.

Telstras literal interpretation of section 3.1 of the USO and the knowledge their monopoly is being removed from around them (so far as wireline goes) gives them little incentive to care and as such they are still rolling out RIMs (Remote Integrated Multiplexers) and WLLs (Wireless Local Loops) in most new housing developments which at best can provide a handful of ADSL 1 connections and at worst provide no wireline internet access at all. Telstras answer: use Next-G. Whilst wireless is fine in theory it’s much more expensive, less reliable and with patchy service coverage it can be simply unavailable. Legally Telstra is doing nothing wrong as the USO treats internet access as a value-add service that is charged separately and hence it does not apply beyond untimed local dial-up calls (originally intended for dial-up internet access).

The government will have difficulty making Telstra do anything now with regards to the USO as it relates to internet access and until the NBN is fully installed Australia-wide, the consumer will ultimately suffer from Telstras private business wrath.