Under the Broadband Connect scheme, rural ISPs could get a subsidy to roll out ADSL in places where it’d otherwise be uneconomical. It was, remembers Duncan, something like $2000 to $4000 per user, depending on the location. If the ISP was well managed, it could be profitable.

Telstra’s response? As Duncan puts it:

They’d get wind that XYZ ADSL was coming to a particular town, then out of the blue they’d announce they’d made ADSL available themselves, usually 2-3 weeks before the smaller company had their service available. They’d back it up with an intensive mail campaign that told people that ADSL was now available in their town. It may have included a phone campaign, although I don’t specifically recall.

The thing with Broadband Connect is that it was open slather; you weren’t awarded a Government contract to provide an area, instead who ever got in and signed people up got their cut.

So you’d have these usually small companies, investing decent money providing ADSL for the first time to communities that Telstra claimed weren’t economically viable to service, finding themselves beat weeks from launch by a mass campaign from Telstra.

Whether the capacity was in or not before as Stilgherrian suggests in the case of ADSL 2 and Cable I don’t know, but the speed to which Tesltra would magically make available these services would suggest just that; that Telstra has the tech in place, and that it would only provide it when a competitor was going to open.

That they’re still doing this in 2009 is a disgrace. It is unbelievably anti-competitive, and for Telstra to sue over the National Broadband Network if it can already be providing, at least to capital cities the SAME service in beyond all belief.

Structural separation, as I’ve always argued is the only solution. Telstra retail and wholesale must be split for the common good. If we have the capacity to provide 100mbps connections in capital cities now, it SHOULD BE PROVIDED NOW, not in a year or two when Telstra decides to use it to undermine the competition.

Hear hear.