Responding to Telstra's National Broadband Network (NBN) submission, Mr. Hackett said ongoing consumer benefit required the retention of ADSL-based broadband services beyond the transition period to the planned Fibre to the Node (FTTN) system.

In Telstra's NBN submission, it proposed that the Federal Government should not force the National Broadband Network operator to "accommodate old and new technologies, which are not compatible".

Mr. Hackett said Telstra's "incompatibility" claim was not based on technical data. "The 'old' (competitive ADSL2+) and the 'new' (Node-based VDSL2) services are in fact technically compatible," he said.

"With appropriate software configuration settings, ADSL2+ can coexist in the new VDSL2 environment. To claim they are not compatible is a Telstra excuse that is driven by its target profit levels rather than consumer outcomes."

"The NBN is a potentially disruptive change that has the potential to increase costs for consumers by undermining competition, so a 'hybrid' model - where ADSL2+ services compete with the NBN's FTTN service - is desirable to ensure that the market drives consumer benefit rather than just rely on regulation."

"Telstra's demonstrated track record of advantaging its own retail operations over services offered to its wholesale customers should cause concern to legislators. Telstra could comply with the letter of the law - by providing access seekers with 'core wholesale services' running at 12 megabits per second, as specified in the NBN proposal - while its own retail operations take advantage of 'non-core' opportunities such as faster services running over the network."

"Retaining access to competitive ADSL2+ services nationally is clearly the way to ensure that competitive tension remains in the marketplace, so that the NBN doesn't just result in consumers paying higher prices for services they already obtain from broadband providers today."

In its own NBN submission, Internode stated that the consequences for consumers of completely cutting copper wires leading to the exchange every time a new Node is deployed would be detrimental and long-lasting. These effects would include:

• Higher prices: Replacing the current diversity of services with an FTTN monopoly will destroy competitive tension. Only the continued presence of competitive services in the market can provide sustainable protection against "monopoly rent" being extracted from consumers
• Less consumer choice: Losing access to ADSL2+ services and price points invites the risk that new services may offer worse price/performance and actually drive consumer benefit backward
• Stalled deployment: Regardless of who wins the tender, impacted parties will take legal action to recoup their lost investments or lost future earnings, substantially delaying the new network
• Stranded investments: Massive investments made over many years in the existing ADSL2+ facilities-based access regime will be destroyed.

The Internode NBN submission cites international evidence proving that an ADSL2+ and VDSL2 "hybrid" model works in practice, not just in theory. Using the appropriate configuration of the VDSL2 DSLAM devices makes their power masks compatible with the existing ADSL2+ service, without significantly degrading the performance or range of either.

The Internode NBN submission also cites the use 'Automated MDF' (AMDF) equipment to allow each consumer the choice of when to move their specific line (under software control) from their existing service over to a potentially more expensive NBN-based service. Using an AMDF, each Node can still be constructed economically, but in a manner that preserves consumer choice and competitive tension.

"The hybrid approach is the most pro-consumer approach to building the NBN," said Mr. Hackett. "This isn't about handing anyone a monopoly on a plate: It is about maximising consumer outcomes and choice as the priority."