Telstra bluffs to the end on broadband bid

THE federal Government may face a legal battle with Telstra if a competitor wins the national broadband network contract.

The Terria consortium is so far the only party to publicly confirm it will bid for the national broadband network contract

Proposals to use up to $4.7 billion in taxpayer funds to build the network are due by midday tomorrow.

The Terria consortium, made up of Optus, iiNet, iprimus, Macquarie Telecom and Internode, is so far the only party to publicly confirm it will bid.

Telstra has stuck by its mantra that it will not bid until the Government guarantees there will be no structural split of the telco as part of the deal.

Melbourne University Business School professor Paul Kerin said Telstra could launch legal action to delay construction if a competitor won the contract.

Professor Kerin said Telstra could also delay rollout efforts by refusing to allow access to the copper line that runs from the node to the premises.

If Telstra were to submit a bid and lose, it could launch legal action claiming it was treated unfairly in the bidding process.

"Whatever happens, it's in Telstra's interests to stall the competitor," Mr Kerin said.

"There are various options to stall, the obvious one that would happen anyway is just stalling negotiations for access from the node.

"Telstra is unlikely to win but it's good tactic to stall. Every day they delay is worth a lot of money to them."

Terria revealed details of its proposals last week.

It costed the network at about $15 billion and said this would buy 75,224 nodes, two satellites, 1360 new wireless base stations and 100,000km of fibre.

The consortia's proposal would provide jobs for 4174 people over five years to build the network.

It would start the build in underserviced regions and metropolitan black spots, and begin the rollout simultaneously across Australia.

Terria chairman Michael Egan said it would contract multiple vendors to achieve this.

"It's to our commercial advantage to roll out to the country areas first, and that's because every customer we get in the country is new," he said. "If we roll out to the city, there is already adequate broadband there.

"Telstra has a different commercial incentive and that is to roll out to the city first, and that way they can eliminate their existing competition."

Mr Egan said Terria had secured the required funding for the project, but would not be drawn on whether this was locked in. "Everything is in place now, except for some of the dotting the i's and crossing the t's," Mr Egan said. "We've spent many millions of dollars on our bid. We wouldn't have got to this stage unless we were confident of our ability."

Telstra's board will meet in the next 36 hours to decide whether it will bid to build the network.

"We are ready to go," a Telstra spokesman said. "We have been doing the planning for three years and are best placed to build a world-class national broadband network.

"We have the experience, the technical knowhow, the trained staff and the financial capacity to do the job properly."