In the last few months, the events surrounding Telstra have inspired every man and his dog to think up ideas, strategies and policies regarding the future of telecommunications in Australia.
In the present circumstances, I believe we should exercise a little restraint and use this opportunity to come up with a sensible plan for the future.
Let’s recap some of the events
The Senate has now rejected the privatisation of Telstra for the second time.
The Prime Minister is continuing to use Telstra as a political tool, by suggesting that former Minister for Telecoms Richard Alston should be brought back into the debate – perhaps even making him the new Telstra chairman.
The Labor Opposition has suggested Telstra divest itself of Foxtel
The ACCC has made a number of structural industry recommendations in relation to the Foxtel divestiture, the structural separation of Telstra, the wholesale arrangements and accounting separation.
ITU, OECD and other national and international organisations have criticised Australia for its low level of broadband penetration
Telstra has started a broadband war, aimed at undermining competition in the market
VoIP, digital TV and WiMax have arrived on the Australian market as potentially very disruptive technologies for Telstra.
Telstra has spent another billion over the last few months on more non-core activities, and more investments (Indonesia) are underway.
The last-mile telecoms infrastructure has been neglected for close to 20 years, certainly in relation to broadband upgrades.
Foxtel has launched digital TV; however, it is severely hampered by the fact of Telstra’s 50% ownership and the draconian government rules on pay TV content and technology issues.
The conflict within Telstra’s board is an indication of more deep-seated problems – within the Telstra structure (CEO, strategic direction of Telstra) and also in relation to the power struggle involving the government, Telstra’s management and News Corp. Sam Chisholm’s connection with News Corp has already been noted, and the lobby for another News Corp ally, in the person of the undoubtedly credible Jacques Nasser, to become the new Telstra chairman needs to be looked at from this perspective as well.
I have probably missed a few events, but these certainly are the most important ones. So let’s use them to draw a few commonsense conclusions:
Technologies are converging (VoIP, digital TV, broadband, wireless). This offers a number of new opportunities for the industry, for regional users, for competition, improved lifestyle options, plus a range of economic benefits. Let’s, therefore, look at these developments from a high-level policy perspective, rather than from the current silo’s-based one.
Ongoing government interference in Telstra’s business affairs is not the way forward, but, while the incumbent continues to be as dominant as it presently is, political interference will remain the order of the day. For example, the new Telstra chairman should not be chosen on the basis of their loyalty to the government.
Telecoms infrastructure is critical to Australian society and the Australian economy and does need government direction and support.
The level of competition envisaged in the Telecoms Act of 1997 has not been realised and the regulatory framework needs to be modernised.
I am sure that we can find more or less widespread agreement on this higher level. Of course, there will have to be a bit of give and take – for example, Telstra might be happy to unshackle itself from government ownership (read ‘political interference’), but it might not be prepared to accept structural separation or an increase in competition. However, Telstra is arguably the most vertically integrated national telco in the world and this requires a very high level of regulations, you can’t have it both ways.
And we also need to be mindful of the issue of the national good.
To date, clouded by its untenable position on privatisation, the government has ignored the reports written by the ACCC, OECD and others. Their behaviour is undemocratic and leaves the door wide open for further political polarisation of telecoms in Australia, and particularly in Telstra.
While most will agree with Labor’s position on Telstra’s divestiture of Foxtel, it would be a missed opportunity not to consider the bigger picture first, to establish where the divestiture fits in, and what effect it will have on the other issues listed above.
Once again we have been presented with an opportunity to do what I have been recommending for many years. All the parties involved should sit down together and produce a blueprint for telecoms in Australia – working from a common vision and developing, step-by-step, a number of strategies, beginning with the ones that will get majority support.
This should all be done judiciously – taking reasonable steps to maintain the balance, but avoiding piecemeal solutions that will only create confusion later.
Most ingredients for the blueprint are already in place in the various reports produced by the ACCC, BAG, Estens, Senate Inquiries, OECD and ITU. Let’s ask for a reliable, independent government think-tank to have a look at all these high-level issues and produce a discussion paper that can then be considered by all the parties involved.
But the government should guarantee that, this time, it would take such a report seriously. Let’s have a democratic process of intelligent debate on these matters, eliminating the politics and making use of the help that can be provided by organisations such as ATUG, AIIA, IIA and SPAN.
Australia – Structural Separation
Australia – Analysis – From telecom to media monopoly
Australia – Analysis of the Estens Report
Australia – Privatisation of Telstra
Australia – Broadband – Analysis Telstra Offer April 2004
Australia – Broadband – Developments and Analysis 2004
Australia – Pay TV – Analyses of the Digital TV Market
Australia – Pay TV – Regulatory – Telstra-Foxtel Divestiture
Global – Broadcasting – Analysis – Digital FTA market in 2004
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