Telstra has announced it has called off its talks with the ACCC over its Fibre to the Node (FTTN) network.



The proposal was announced in November last year, with Telstra planning to offer 12Mbit/s ADSL to mainland capital cities by replacing large sections of copper phone lines with fibre.



But the proposal hinged on Telstra achieving a "satisfactory regulatory outcome", which at the time was zero access to competitors. Since that day, Telstra relented and began talks with the ACCC over how competitors could access the network.



But today, Telstra said that discussion had "reached an impasse" and placed the blame squarely on the ACCC. "The major stumbling block was the ACCC's unwillingness to recognise the actual costs that Telstra incurs in providing its services and, especially, the costs it incurs in providing services to rural, regional and remote Australia", said a Telstra statement.



The ACCC says it is "perplexed" over Telstra's decision to stop talks, stating that discussions with Telstra had occurred as recently as yesterday.



The reasons are convoluted, but Telstra says that the talks broke down not because of disagreements over competitor access, but because of fundamental differences in view over the cost of providing service to regional areas.



Telstra wants to average the prices it charges over the whole of Australia, meaning metro users will subsidise those in regional areas. The ACCC is of the view that the pricing should be banded according to remoteness.



But the ACCC says that the issue never came up. "At no stage in the discussions has Telstra ever proposed that its FTTN network would be rolled out to rural and remote Australia", said ACCC Chairman Graeme Samuel.



Telstra competitors have seized upon the apparent confusion over Telstra's reasons for giving up on FTTN. "By declaring war on the competition rules, Telstra succeeded in creating months of confusion and uncertainty for its competitors' investment plans while it was falsely talking up the progress of discussions with the Commission," said Competitive Carriers' Coalition executive director David Forman.



The CCC has called on the ACCC to rule on the many outstanding access disputes over ULL pricing. The ACCC indicated today that this would occur shortly. "There are multiple carriers in a position to put in place high-speed broadband networks using DSL, FTTN, wireless or other technologies", said Samuel. "All they await is certainty as to Telstra's FTTN plans."

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