Its Time To Question Where The ACCC's Loyalty Lies
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COMMENT: Lets cut to the chase Australia is about to be screwed big time by meddling government bureaucrats who work for the Australian Competition and Communications Commission.

This is not the Federal Government as Opposition leader Kim Beazley makes out this is a department that works independently in assessing business competition in Australia. After months of negotiations with the Australian Competition and Consumer Commission, Telstra have been forced to pull the plugs on a very important $4billion high speed internet network because they could not reach agreement with the ACC over pricing.

In a nutshell several foreign companies like Optus owned by Singapore Telecom and in part the Singapore government, AAPT owned by New Zealand Telecom and in part the New Zealand government along with several other broadband and telecommunication Companies wanted Telstra to fund a brand new Internet network to the tune of $4 billion dollars. Then when it was built they wanted to get low cost access to the network without forking out any money for the infrastructure other than a fee per connection.

These competitors knew that if they squealed loud enough the ACCC would bow to their demands by forcing Telstra to give them access to the network at rates set by the ACC. This they knew would provide them with an advantage over Telstra.

What these Companies have learnt is that the ACCC is a soft touch who in the past have favoured overseas telecommunication Companies at the expense of Telstra who the ACCC see as a giant monopoly despite the fact that we have more than 50 broadband ISP’s and telecommunication Companies operating in Australia to a population of only 20,000,000 or 6,000,000 households.

 The Telstra plan would have provided high-speed broadband to main capital cities where 80% of Australians live and given competitors a chance to broaden their services to customers but the ACCC wanted more.

Telstra argued it could not justify going ahead with the project under the price regulations proposed by the competition watchdog. It also put some of the blame at the Government’s feet, saying its policies were confused and inconsistent. Mr Beazley said it was a dreadful outcome.

What I believe should have happened is that the ACCC along with Telstra should have tabled the cost of building the network.  Competitors should have been given the opportunity to invest in the infrastructure project. For those who did invest they would have got a discount equal to their original investment. They also would have had a say in the setting of the ongoing price for access to the network.

The fact is that several of the organisations that have been peeing in the ear of the ACCC for cheap access to the network would not be in a position to raise the capital to incest in a new broadband network.  

 Telstra is one of the most important organizations in Australia today. They are key to delivering services and capability that will allow Australia to grow as a nation while providing services for all Australians that are equal to or even better than some of the most advanced Countries in the world. 

A key component of this technology is broadband and devices that interconnect to communication architecture.  Right now Australia is way behind in the race to deliver infrastructure that will deliver powerful information and communication resources for both business and consumers. The reason is that Telstra is being treated as a political football instead of commercial organizations that can deliver untold benefits for all Australians going forward.

 

Telstra is being slowed down from delivering leading edge capability because politicians and organizations like the Australian Competition and Consumer Commission are more interested in a politically palatable organisation than an organisation that can be out there delivering services such as very fast broadband, mobile connectivity that interlinks with broadband video and data services as well as a new generation of entertainment technology and services. 

The services and capability that smart communication infrastructure can deliver for Australia is extensive and the recently hired senior Telstra management team have extensive global communication experience that is invaluable. They also know where the pitfalls are in rolling out new billing systems, broadband services and new communication capabilities and this type of knowledge is worth spades.

I for one want Australia to be seen as a smart Country that has infrastructure that allows Australia to flourish.   Unfortunately politicians particularly ones from the bush are only interested in communication for a small part of our community around 20% not the 80% that funds the 20% in the bush. Unfortunately many rural seats are swinging seats crucial to the election of the government of the day and as such when the bush say jump the government say how high at the expense of the vast majority of Australians.

As politicians fight over Telstra and the media continue to give Telstra management a bucketing. Children are being denied access to powerful broadband education networks that can deliver low cost interactive class room education programs. Business is being denied access to services that allow information to be pumped to mobile devices quickly and at low cost in the home.

Consumers are being denied access to advanced entertainment and home technology such as IPTV or security networks that allow homes to be monitored 24/7 from a mobile phone or work PC.

Telstra is an Australian Company and what the ACCC is doing is making it very easy for foreign Companies to piggyback off the back of Telstra infrastructure and investments. In a regulated environment like Australia Companies like Optus and AAPT love to keep taking issues to the ACCC because the more regulation fallout there is the more they benefit.

What they want to achieve is for Telstra to put up all the capital and management expertise to build a new communication network and when built get low cost access to it in the juicy capital cities of Australia. They want Telstra to take responsibility for supplying services to the bush because this is expensive and the last thing that the likes of Primus, Optus or AAPT want to do is to be burdened with unprofitable regions of Australia.

I believe that there are two simple options. Firstly the cost of building and managing a new wireless broadband network should be identified. Those wanting access to the network should either put up the capital to build the network and in turn get a discounted rate based on the amount of capital they invested in the building of a network.

 

Or , if they don’t want to put up capital they have to pay a higher access fee.

Additionally all Telecommunication Companies should be forced via legislation to contribute to the supply of services to regional Australia via a tariff on all services they sell.  At the same time consumers and business organizations in regional Australia should have to pay a higher fee for access to the networks as it is they who have chosen to live and operate in the bush. We also need to remember that the cost of living in the bush is significantly cheaper than metro Australia and that regional Australia generates an enormous amount of wealth from commodities and agriculture.    

In the short space of time that Sol Trujillo, the CEO of Telstra  has been at the helm of the telecommunications giant he has been able to trim costs, identify that the Telstra billing system was a shambles and deliver a solution. He also identified that we needed a new fast broadband network but unfortunatly his major stumbling block has been politicans and bureaucrats who have dished out so many hurdles that one has to believe that the interest of politicans and bureaucrats come first and the Australian public second.