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Telstra not focussing on its core responsibilities

By Lindsay Tanner and Kate Lundy - posted Tuesday, 31 August 2004

Australians have every right to be dissatisfied with Telstra’s service levels. The Government’s own telecommunications inquiry chairman, Dick Estens, recently conceded that Telstra’s bush services are a “shemozzle”. Just this August the Senate Communications Committee reported that:

  • many Australians, particularly regional Australians, do not enjoy universal access to reliable high-speed access to the Internet
  • mobile phone coverage remains patchy in regional Australia
  • inadequate maintenance and investment has seen a decline in the standard of the fixed-line copper network

A separate Senate Report on broadband recommended that Telstra exit from its Foxtel investment. This adds weight to similar calls from the ACCC and Labor. Telstra is the arguably the most vertically and horizontally integrated telecommunications company in the world. Getting Telstra out of Foxtel will provide impetus for more competition in communications and encourage Telstra to focus on its core telecommunications responsibilities, such as broadband roll out. Unfortunately new Communications Minister, Helen Coonan, dismissed this call just a few weeks into her new job.


Is it any wonder that many Australians are unhappy with Telstra? Regional Australians instinctively know that if Telstra is privatised it will leave town faster than the banks. A privatised Telstra will focus on its lucrative markets in the cities and neglect its regional customers. A privatised Telstra would be a huge private monopoly too powerful for any Government to effectively regulate.

The Howard Government’s only policy is to fatten up and privatise Telstra. John Howard has allowed Telstra to massively increase its telephone line rental fees under his Telstra price laws. In 2000 line rental fees were $11.65 per month, now they are between $26.95 and $29.95 on standard plans and will soon be well above $30 per month. Telstra itself admits John Howard’s line rentals are set to provide Telstra with a huge $180 million windfall this financial year. Under John Howard you pay more and get less.

Broadband access in regional Australia remains woefully inadequate. For instance, a recent state Victorian Government survey showed northeast Victoria was missing out on broadband. The report found that over 5,200 businesses and households in northeastern Victoria want access to adequate broadband services. The report identified several local areas that need broadband including Numurkah, Alexandra, Beechworth and Rutherglen. Under the Howard Government too many regional areas are missing out on the broadband revolution and the huge economic and educational benefits it brings. Piecemeal Government programmes that give Telstra money for rolling out broadband when it should be doing so anyway are not the answer.

Until recently the Howard Government said broadband was all about porn and video games. But small businesses know that broadband is a huge driver for increased competitiveness, nationally and globally. Not surprisingly given the Howard Government’s previous lack of interest in broadband, Australia ranks 20th out of 30 in broadband access in the OECD. President Bush recently said the United States’ 10th ranking was unacceptable.

Labor will get Telstra to focus on its core telecommunications responsibilities and accelerate the roll out of broadband across Australia. Labor will also ensure the regulatory settings are right, to allow competitive forces to help get regional broadband roll out happening. No one will be able to squat on broadband spectrum under a Labor Government.

Australians also care about their basic telephone service. But not only are consumer prices rising, services are declining. Labor recently revealed that Telstra was using mass service disruptions (or the weather) as an excuse for not meeting customer service standards for nearly one in ten services. When we asked the Minister, Helen Coonan, about this outrage in federal parliament, she referred inanely to a recent ADSL outage that is unrelated to this growing Telstra rort. Labor has released several Telstra reports recently that show rising fault levels in Telstra’s fixed line and mobile networks. The massive investment and staff cut backs that have occurred at Telstra under John Howard have seen the quality of Telstra’s network decline.


Labor wants to get Telstra back on the job delivering decent telecommunications services at reasonable prices to all Australians, regardless of where they live. We want Telstra focused on accelerating broadband roll out and we want regulatory settings that encourage rather than impede greater competition in broadband, especially in regional Australia. Telecommunications services, including broadband, are essential services. They are also critical to our future economic prosperity. Australia can and should be doing more. 20th out of 30 is just not good enough.

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About the Authors

Lindsay Tanner is Shadow Minister for Communications and Shadow Minister for Community Relationships and the Labor Member for Melbourne.

Senator Kate Lundy is federal Shadow Minister for Information Technology, Sport and Recreation, and the Arts. She is a Senator for the ACT.

Other articles by these Authors

All articles by Lindsay Tanner
All articles by Kate Lundy
Photo of Lindsay TannerLindsay TannerPhoto of Kate LundyKate Lundy
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