Telstra dropped from Australian broadband network competition

Dec. 15, 2008
DECEMBER 15, 2008 By Stephen Hardy -- The Australian government has informed incumbent Telstra that its bid to participate in an AUS$5 billion National Broadband Network project was rejected for failing to meet the RFP's mandatory parameters.

DECEMBER 15, 2008 By Stephen Hardy -- The Australian government has informed incumbent Telstra that its bid to participate in an AUS$5 billion National Broadband Network (NBN) project was rejected for failing to meet the RFP's mandatory parameters.

The bid was rejected because an independent panel determined that the bid failed to include a provision for meeting the needs of small and medium enterprises.

Not surprisingly, Telstra wasn't pleased. "The Commonwealth could hardly have dreamed up a more trivial reason to exclude Telstra from the NBN. This is a process that seemingly excludes bidders on such trivial and legally questionable technicalities but doesn't take any action on material issues such as financing and having the technical capability to build the network," said Telstra's chairman, Donald McGauchie, in a press statement. "What is even stranger is that the Minister has ample powers to accept Telstra's SME Plan under the RFP and have his Expert Panel get on with a process that includes Telstra."

Telstra's potential participation had been a subject of controversy from the start. In particular, the carrier bristled at suggestions that it would have to employ functional separation on the network. As the result of this and other disagreements, Telstra's response to the RFP was only 13 pages long and not a full bid, according to press reports.

Remaining bidders included Singtel Optus, Acacia, Axia of Canada, the Tasmanian government, and TransAct, a utility group based in Canberra.

Telstra said its bid did comply with the RFP and it is the bidder best positioned to create such a network. "This is the largest, most complex NBN build anywhere in the world," the carrier concluded in the press statement. "Australia now risks being the only country ever to build an NBN without the existing fixed network owner in the most difficult financial climate in decades."

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