Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Broadband ... the only game in town

By Selwyn Johnston - posted Thursday, 24 May 2007


This means that government monopolies should be made “competitive” and open to competition. The government agencies involved included those supplying water, energy and other taxpayer-owned infrastructures, in fact all those businesses built up as Government Owned Corporations [GOC’s], and paid for by taxpayers, but more particularly by our forebears.

Included in this group of agencies was telecommunications, owned and operated by the federal government through the then GOC Telecom. Despite the fact that the majority of the Australian public (taxpayers) opposed the sale of the then Telecom (which had metamorphosed into Telstra) it was sold nevertheless, or more accurately it was partly privatised.

In fact it is doubtful that the government “owned” Telstra as distinct from holding it as a public trustee, but that’s all water under the bridge now. This of course brings us back to our broadband discussion, but there is just one more divergence to go before we can fully return.

Advertisement

As part of the anti-monopoly legislation it has been decreed that companies that have major infrastructure assets such as rail lines, port facilities, oil and gas pipelines, communications cables and the like are required to share these assets with competitors. Clearly a usage cost has to apply, but the question you would have to ask is would you risk millions of your dollars to give a competitor a leg up and vastly complicate your life. The answer of course is NO, but it happens in Australia today. Just ask BHP Billiton about rail lines and port access; and the disputes that have gone on between Telstra and the Australian Consumer and Competition Commission (ACCC) have been at times acrimonious vocal and public.

Telstra’s asset, or perhaps problem, is what is known as the “last mile” which in real life means the Telstra copper line connection from the telephone exchange to your property. The ACCC has decreed that Telstra’s “last mile” be made available at a certain charge to other competing carriers and Telstra has challenged this fee assessment and having set this down we can now completely return to broadband.

For some time now it has been recognised that what Australia needs to bring it into line with broadband speeds enjoyed by some other advanced countries is what is called FTTN (Fibre to the Node) technology which means simply replacing the Telstra copper lines with fibre optic cable.

Telstra is quite prepared to do this but with the very large investment that will be required Telstra, understandably enough, wants some enduring and substantial protection for its investment. After all Telstra’s experience with the ACCC, at least in its view, has not been encouraging. Were Telstra given this assurance then Australia would be up to date in smart order. But this would put Telstra in an all but monopoly position, and of course, not only is that what Telstra was before it was sold, we have the problem of the anti-competition laws.

The practical question as to whether or not a country the size of Australia can afford anything but a monopoly communication transmission entity is one that seems never to have troubled politician’s minds.

However, to overcome all these problems it would appear that a consortium of some 11 telecommunication carriers has floated the idea that they could, and would, build a parallel service to Telstra’s.

Advertisement

Of course their project at this stage appears to be unfunded but it would also appear that the new Leader of the Opposition has indicated that he will solve this problem and put something of the order of $4.5 billion (taxpayers-dollars) to assist the consortium with their proposed project. Not that $4.5 billion will be anything like the total cost of the project. Further more, absolutely no detail has been given as to exactly how this duplication is to be achieved and to what extent, if any, Telstra’s existing facilities would be involved.

So let us slip back to business for a moment. There is such a thing called a “stranded asset”. A stranded asset is one, necessarily expensive, that is built for a specific purpose and suddenly the “purpose” no longer exists, or is greatly reduced. The value of the asset under these circumstances is substantially reduced and financiers are very well aware of this circumstance, as are all quality managers. Given this, either Telstra or the consortium is going to have a stranded or partially stranded asset at sundown. This is what Telstra is trying to avoid, and looking at the situation seriously Telstra is in the strongest position.

Which seems to mean that Mr Rudd’s donation of $4.5 billion (taxpayers-dollars) to any consortium is at worst a long shot non-achieving punt, or at best another hollow election stunt, which for a change would be something of a break for us all. But certainly Mr Rudd should have a presence there and as gamblers would say … broadband is the only game in town.

The remaining problem for Mr Rudd is that both the government and Telstra have yet to play their hands. What cards they hold will ultimately determine the winner.

  1. Pages:
  2. 1
  3. Page 2
  4. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

31 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Selwyn Johnston is an independent candiate for the federal seat of Leichhardt in far North Queensland for 2007.

Other articles by this Author

All articles by Selwyn Johnston

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Photo of Selwyn Johnston
Article Tools
Comment 31 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy