updated 10:55 am EDT, Thu June 23, 2011
Ultimately will switch copper wires with fiber
Australian telecom giant Telstra has come to terms with that country's government to effectively shut down its copper based broadband services and help migrate customers to fiber based services. The new fiber infrastructure, known as the National Broadband Network (NBN) will be controlled by the government and available to multiple providers, including Telstra. In return, Telstra over time will receive post-tax payments with a net present value equivalent to about $11.6 billion US.
Under a series of agreements, Telstra will gradually disconnect its broadband customers from its existing HFC cable network infrastructure and migrate them to NBN's fiber-based network. Telstra's cable business will still use the HFC network. Additionally, Telstra will give NBN access to certain assets including dark (unused) fiber and exchange space.
The NBN represents an effort by the Australian government to bring 100Mbps broadband Internet service to 97 percent of the country's population over the next 10 years. The remaining seven percent will be networked by 12Mbps wireless or satellite services. Estimated cost of the total project is about $38 billion US.
The Australian government passed legislation last November which essentially split Telstra into two businesses, wholesale and retail, to facilitate the creation of the NBN.
The agreements between Telstra and the Australian government must be approved by both Australian regulators and Telstra's shareholders.