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NBN to buy TransACT’s FttP network off iiNet

By Barcham - 22 May 2013 54

That title makes less sense the more you read it.

Instead of over-building and trying to compete with iiNet, the NBN are opting to buy TransACT’s network from the internet provider.

The TransACT network currently covers 8,500 premises, and a further 4,500 premises are planned or already under construction. iiNet announced that the deal would be settled over the next two months subject to Australian Competition and Consumer Commission approval.

Under the deal, TransACT will also complete the construction of pit and pipe infrastructure in new estates until 2017 and then transfer ownership to NBN Co. NBN Co would also get access to ducts across the ACT as part of the deal.

iiNet had been looking to sell the network to NBN Co since the takeover of TransACT in 2011. In addition to the fibre network in the ACT, TransACT also owns a HFC network in Geelong, Mildura and Ballarat. Under legislative changes made as part of the implementation of the National Broadband Network (NBN) policy, iiNet would not have been able to expand these networks, and the company was concerned that NBN Co would overbuild in those areas.

In late 2012, iiNet CEO Michael Malone warned he would undercut NBN Co on prices in those areas if the company did decide to overbuild rather than buying out iiNet’s networks.

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54 Responses to
NBN to buy TransACT’s FttP network off iiNet
Rollersk8r 2:31 pm 23 May 13

As a long-term iinet customer I don’t understand why they’ve never contacted me to offer some kind of a deal to get on the TransACT network?? I assumed getting as many Canberra customers as possible on to TransACT would be priority no.1 after they made the purchase??

This post at least reminded me to check the TransACT website again – yep, still very confusing and appears too expensive to bother investigating further…

beejay76 11:49 am 23 May 13

gazket said :

so the government is buying Transact so they can limit competition and charge us more to access the internet.

well played .

No. I’m with Transact’s FTTP network and Transact force us to pay line rental, when it’s clearly unnecessary. With NBN the internet packages are better value and you don’t have to pay line rental, instead relying on VoIP. I can’t wait to move over to cheaper telecoms when NBN buy them out. I’ve been sharpening my ombudsman knives over this one, so I’m really glad to see it go through.

dungfungus 11:20 am 23 May 13

thatsnotme said :

dungfungus said :

Why is it referred to as “TransACT”s network?
I understood that iinet purchased TransACT (you remember, Actew got $4 million dollars for their share after losing about $55 million but it was still a “win win” deal) so shouldn’t this article read “iinet are selling thenetwork to the NBN?”

I would be interested to know the figures involved.

Although iinet bought them, the TransACT name still exists, and they’re still run as a separate company – in much the same way as Internode do, despite being purchased by iinet. So it’s probably correct to still describe it as TransACT fibre. Makes no difference in the long run though.

Thanks for that – sounds totally sensible.
I see in the CT today that purchase price was $6 million. I have no idea if that is cheap or expensive but it would be interesting to crunch the numbers using $6 million as a benchmark for a known number of residences that receive the service and then apply that to all residneces in Australia. This could give us the likely cost of the NBN which so far has eluded even the people that are responsible for it.

Watson 10:47 am 23 May 13

Funny. I’ve just come off the phone with iiNet. Trying to find an affordable alternative for TransACT’s only phone plan available to FTTP customers. What a bloody rip-off! I had been using VoIP for years and now I will have to pay connection fees and timed rates for ALL my calls?! I asked about TransACT’s “Netphone” and was told that it wasn’t compatible with FTTP. Are you joking? Surely the only way to deliver phone services over optic fibre is via the internet? And iiNet does over a VoIP service for fibre, but to use them as my ISP would cost me more for the same data compared to when I just get my data through TransACT.

Grail 8:30 am 23 May 13

Eaglehawk said :

Ok, let’s see if I can get this right.

TransACT Broadband consists of 5 different technologies

VDSL, VDSL2, FTTP, ADSL, HFC.

Of those 5, only 4 apply to Canberra. (HFC isn’t available).

They’ve only sold the FTTP connected premises to NBN. These are mainly Forde, Bonner, some parts of Franklin, some of Casey, most of Crace. Nobody really is sure.

Grapevine is an ISP that provides services to any of the 4 types of connections, so whether you’re affected or not depends on which area you live in.

Hope I got that mostly right

TransACT owns/owned these technologies: FTTN (optic fibre in the street, VDSL 1 to the home with those funky white modems which split the VDSL service into TV/set top box, POTS and a data connections), ethernet (i.e.: you can actually buy an Ethernet connection from one side of town to the other, with TransACT taking care of the fiddly details like lighting the fibre), dark fibre (i.e.: you can actually buy a spliced-through fibre optic cable from one side of town to the other), and FTTP (fibre right to your building, which terminates at a breakout box which provides TV, data, POTS) which some people mistakenly refer to as FTTH: FTTP is Fibre to the Premises, meaning that if you’re in a multiple residence premises such as an apartment block there is a fibre (or fibres) to the premises, and then typically a VDSL 2+ infrastructure inside the complex to the individual residences. Except for Axis apartments because the builder was dumb.

In addition to those, TransACT was leasing naked copper, ADSL and ADSL 2+ in Canberra. So if you are outside a TransACT fibre area but still getting a TransACT service, odds are you are getting ADSL 2+ from TransACT that they have leased off someone else. In many areas, TransACT actually owns the ADSL equipment and is just leasing the copper in the ground from Telstra (and leases the space in the exchange to house the ADSL equipment, etc).

The HFC network is known to us layfolk as “cable TV” and is what is used in Ballarat & Mildura. And incidentally if you think cable TV can serve as a basis for the high speed broadband network of tomorrow or the next year, you should move to Ballarat and try it out. You’ll be back with your hat in your hand in a few months, don’t you worry.

As for the areas of Gungahlin serviced by FTTH, you can bet that there are people who are very sure of which suburbs (nay, which individual residences) are serviced by FTTH, otherwise TransACT would have a heck of a time sending bills out to get the money to pay for the network. Harrison, Forde, Bonner, Crace,

AFAIK, the FTTH rollout include(s/d) Wright and Coombes (the new Molongolo township between Weston and the Molongolo river).

As for ACTEW’s claim of 55M in losses? Well, what ACTEW calls a loss some people call an investment: installing fibre optic cable (i.e.: engaging in an infrastructure project) costs money. Let’s see if ACTEW reports “losses” for the installation of the expanded Cotter Dam, or if they write the money off as capital investment. If they write off the expanded Cotter Dam as capital investment or any other form of non-loss, they are hypocrites.

JC 7:22 am 23 May 13

gazket said :

so the government is buying Transact so they can limit competition and charge us more to access the internet.

well played .

Nope. Neither Transact* nor NBN provide internet. Both provide the underlying infrastructure so that others can provide internet. Now don’t know about you but I don’t want competition in the infrastructure. I remember when I lived in Sydney during the pay TV wars and always found it bizarre to see Telstra and Optus crews putting up near identical systems on the same poles. Just adds far too much cost and discourages competition.

In fact this is one of the reasons people who live in areas with RIM’s installed (ie most of Gungahlin and most newer suburbs) couldn’t get choice of ADSL2 providers. Under the laws Telstra had to provide wholesale ADSL to other ISP’s at a given price, but not ADSL2. Now with a RIM the ADSL equipment needs to be in the street, so no ISP other than Telstra/Bigpond could justify the expense, so want ADSL2 go to Bigpond (which is what I have done), or stick with ADSL1.

*Transact was also clearly in the ISP market too with Grapevine, but they were separate business.

thatsnotme 10:46 pm 22 May 13

dungfungus said :

Why is it referred to as “TransACT”s network?
I understood that iinet purchased TransACT (you remember, Actew got $4 million dollars for their share after losing about $55 million but it was still a “win win” deal) so shouldn’t this article read “iinet are selling thenetwork to the NBN?”

I would be interested to know the figures involved.

Although iinet bought them, the TransACT name still exists, and they’re still run as a separate company – in much the same way as Internode do, despite being purchased by iinet. So it’s probably correct to still describe it as TransACT fibre. Makes no difference in the long run though.

dungfungus 9:40 pm 22 May 13

Why is it referred to as “TransACT”s network?
I understood that iinet purchased TransACT (you remember, Actew got $4 million dollars for their share after losing about $55 million but it was still a “win win” deal) so shouldn’t this article read “iinet are selling thenetwork to the NBN?”

I would be interested to know the figures involved.

Eaglehawk 9:25 pm 22 May 13

Ok, let’s see if I can get this right.

TransACT Broadband consists of 5 different technologies

VDSL, VDSL2, FTTP, ADSL, HFC.

Of those 5, only 4 apply to Canberra. (HFC isn’t available).

They’ve only sold the FTTP connected premises to NBN. These are mainly Forde, Bonner, some parts of Franklin, some of Casey, most of Crace. Nobody really is sure.

Grapevine is an ISP that provides services to any of the 4 types of connections, so whether you’re affected or not depends on which area you live in.

Hope I got that mostly right

gooterz 8:45 pm 22 May 13

MERC600 said :

I regret I’m not realy up on all this thing, but I’m with Grapevine, so is this what NBN are looking at ?

New parts of Canberra that were built pre current NBN had fibre installed. These connect at much faster speed than the old parts of Canberra. NBN is buying this.

NBN Co had to buy transact FTTP its the only way they can bump up their install numbers for no 2013 cost!!!!

iiNet would be screwed either way, very limited footprint for FTTP and Gov has forbid them from ever upgrading their network to reduce competition for NBN, so it might actually make money (despite the overly optimistic 10 year finish date.)

Why doesn’t NBN Co subcontract out iiNet to connect the ACT?

JC 8:31 pm 22 May 13

MERC600 said :

I regret I’m not realy up on all this thing, but I’m with Grapevine, so is this what NBN are looking at ?

Not really. To put it simply NBN are an infrastructure “company”. They build the infrastructure then lease this to service providers such as ISP’s like Grapevine.

Transact is also an infrastructure company that builds and leases. Where it gets a tad messy I guess is Transact is now owned by an ISP and Grapevine is owned by Transact.

What I gather will happen here is the Transact infrastructure will go to NBN, the release above says FTTP, which is in new suburbs such as Forde etc. Above it does mention the HFC (or fibre to the node network) that transact installed elsewhere in Canberra (where there were power poles) but it is not clear if this is also included in the sale. I gather grapevine will remain with iinet as that is more up their ally.

gazket 8:05 pm 22 May 13

so the government is buying Transact so they can limit competition and charge us more to access the internet.

well played .

dpm 8:01 pm 22 May 13

Makes sense to me. But then again, perhaps i’m a bit slow!

mikal 7:48 pm 22 May 13

It sounds like overbuild is still on the cards for HFC areas though?

MERC600 6:15 pm 22 May 13

I regret I’m not realy up on all this thing, but I’m with Grapevine, so is this what NBN are looking at ?

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