Build it and we'll pay

The Feds are now trying to come to grips with the same predicament.

Regional services would be far more manageable if Telstra still had a monopoly. Competition encourages cherry-picking of those customers who can justifiably contribute towards network development in remote areas.

It’s a chicken-and-egg quandary for Telstra - and QR. To offer a sustainable rural service, you must first shore-up the critical mass needed to capture network synergies and practice price discrimination. Your efforts to take a holistic view, however, are relentlessly undermined by competitors who convince city folk they should not subsidise their country kin.

As suspected by the Queensland Nationals, full privatisation will see Telstra pander more and more to self-interests at the expense of the network. The bush will become a burden for the budget and bureaucrats to sort out.

A large slice of responsibility for Australia’s poor infrastructure performance rests with those who framed NCP.

Legislated monopolies were put in place to protect those required to make difficult choices that benefit the network - not particular interests. Glaring transparency, brought about by aggressive competition and regulation, makes sensible pricing and investment decisions near-impossible. As seen with electricity - and potentially rail - in Queensland, the system is being hurled towards a short-term, narrow perspective that is in the real interests of no one.

Federal policy-makers failed to comprehend these risks when they kicked off NCP. The states are still paying for it. Hopefully, the Telstra situation will lead the federal government to finally acknowledge the flaws and set the scene for developing truly sustainable infrastructure networks.