NBN Co mum on Telstra negotiations, copper costs

Negotiations with Telstra over a new National Broadband Network deal in light of the government ditching its predecessor's fibre-to-the-premises (FTTP) rollout are "progressing" according to NBN Co – but that's pretty much the extent of the information that the company charged with rolling out the NBN is willing to reveal publicly.

Appearing before a Senate Estimates committee, NBN Co executive JB Rousselot said there is "good will" on both sides of negotiations between the NBN wholesaler and the telco.

"These negotiations are progressing. There is good will on both parts. They are complex... They are progressing and both parties are entering that conversation with good will," Rousselot said.

Asked by Greens Senator Scott Ludlam whether the negotiations were meant to be concluded by the middle of the year, NBN Co's head of strategy and transformation — who [artnid:529776|joined the company]] in October last year and led the strategic review into the network — said that NBN Co "didn't have a fixed date in the strategic review".

"We made some assumptions that had some allowance for that negotiation to take some time. They were part of the redacted section of the strategic review for commercial reasons not to put us at a disadvantage in our negotiations with Telstra."

The change in direction from a majority FTTP rollout to fibre-to-the-node (FTTN) for most premises means NBN Co will have to rely on Telstra's copper for the 'last mile' connection. Under the deal initially negotiated by NBN Co, the government and Telstra the telco was to shut down its copper network and transfer all customers to the NBN.

"What kind of leverage do you bring to those negotiations or are you simply a price taker at this point?" Ludlam asked Rousselot.

The NBN Co executive said the development of the NBN was also in the Telstra's interest. "Ultimately they will become a very large customer of NBN so they have an interest to make sure that that project goes through," he said. "So those are the types of conversations [we are having] with them."

"They are a private company; I expect that they would be doing as good as they can [in negotiations] from a commercial perspective," Rousselot said.

"A similar thing from an NBN side – we will try to get as good a deal as we can for the shareholders and ultimately the taxpayers of Australia."

Rousselot said he didn't have any information that indicated NBN Co would fail to close the new deal within the company's funding envelope.

Citing commercial reasons, the executive said that he could not reveal whether the company was seeking to buy or lease certain parts of Telstra's infrastructure nor publicly release NBN Co's assumptions about the maintenance and remediation costs of the copper network, which were redacted in the strategic review.

"And so it's the end of May 2014 and you still can't tell us what those estimates are?" Ludlam said.

"Until the negotiations are completed, I don't think it would be appropriate to release that number," Rousselot said.