A Four Corners investigation into the National Broadband Network (NBN) has revealed the Federal Government changed its original, $4.7 billion plan to avoid having to compensate Telstra to the tune of $20 billion
Communications minister, Senator Stephen Conroy, said he believed the initial proposal for a fibre-to-the-node network would have required the government to cut the copper network, thereby appropriating the property rights of Telstra.
That would have led to a large compensation bill and Telstra competing against the NBN.
"The government could spend $15 billion to build a fibre-to-the-node network (and) pay $15 to $20 billion to Telstra for compensation," Senator Conroy told ABC's Four Corners program, due to screen on Monday night.
"Then Telstra could take that money and build a fibre-to-the-home network past you and strand 70 per cent of $15 billion on the side of the road."
The incumbent telco, then led by Sol Trujillo, submitted a non-compliant bid to build the original fibre-to-the-node network in 2008 but was excluded from the tender ahead of the government's announcement to completely change the initiative. Under Labor's current plan, which uses fibre-to-the-home technology, the government is paying Telstra $11 billion to buy its copper wire and hardware network as part of the estimated $36 billion cost to build the NBN.
Former Telstra group managing director Phil Burgess said Telstra would have taken action if the original proposal was adopted.
"Absolutely, that's the way competition works," he told Four Corners. "The only way it would be stopped is if they have laws that will prevent it."
Burgess said a meeting with then prime minister Kevin Rudd and adviser David Epstein revealed the Labor Government's intention for Telstra to divest Foxtel and separate the telco's wholesale and retail arms.
"That is when they let the cat out of the bag," he said.
Follow Computerworld Australia on Twitter: @ComputerworldAU