BuddeBlog

Both understand telecoms
It is good to know that the two politicians who are most important to the telco industry both have an excellent understanding of it. They share the view that telecoms is important for the country and is a very important enabler in areas such as e-health, education, smart grids for energy savings, etc.

Senators Coonan and Conroy are also committed to making government funds available to provide a nationwide service that offers equivalent services at similar prices around the country. Importantly, this includes the funds needed to make infrastructure investments in regional areas.

And I believe that, from an industry perspective, most will agree that if we set the politics aside we will be able to work with either Senator Coonan or Senator Conroy.

Senator Coonan
Senator Coonan has certainly earned the respect of the industry as she has had to deal with some situations which were outside normal business practices. At a recent telco CEO dinner we expressed our gratitude to her for the support she gave to fundamental policy issues such as the safeguarding of a competitive environment.

That’s not to say there were no worrying moments for the industry. The Minister did come tantalisingly close to doing a deal with Telstra, and the industry should be grateful to the ACCC and the Treasury for making sure that this didn’t happen.

Unfortunately the Minister inherited a messy telecoms portfolio. Most of the problems that we are currently encountering would have been totally avoidable if the government had acted properly in the first place, during their first eight years in government.

Senator Conroy
Senator Conroy has made himself very accessible to our industry. He has consulted extensively with the players, taken an interest in new developments, and discussed options and plans as to how Labor can assist in developing some of the new national opportunities.

I am reasonably confident about ongoing industry cooperation under a Labor government; however, in the event that Senator Conroy becomes Minister for Communications, he will have a rather complex situation to deal with. He will need to take into account not just Labor’s plans but also the Broadband Connect (OPEL) and Expert Task Force issues. He needs to be strong and to base his approach on a sound regulatory foundation. Such an approach would earn him the support of the industry.

It would be great if Telstra were prepared to participate in this debate, but otherwise he would need to be decisive and immediately initiate the structural separation process that he has indicated he supports.

Foundations are not right
Without a sound regulatory basis any investment from either side will largely be wasted, and that would mean billions of dollars down the drain. Building on sound foundations could also cut the estimated costs of $5 billion into half. In one way or another we need equivalent and transparent access to the future FttH networks, either through commercial wholesale arrangements (as in the Netherlands, Sweden and Denmark) or through some sort of structural separation between infrastructure developments and the retail services provided over these networks (UK and New Zealand). I think neither the Minister nor the Senator would disagree with me on the need for this – it is just a matter how we get there.

Part of the Minster’s legacy is that under the sale of Telstra legal obligations now exist, which are making it difficult for her to begin a process of structural separation.

The Senator is on the public record as supporting structural separation, but he has subsequently gone extremely quiet on the issue. The fact that Telstra is supportive of the Labor infrastructure plans is also creating a sense of wariness amongst the industry players. How genuine is Labor’s commitment to structural separation? I believe Telstra is playing politics, as it knows only too well that it would be worse off under a Labor government.

Who will be the Minister
Who will the industry be working with after the election?

The Minister has already indicated her interest is in the portfolio of Attorney General and, as she has done a great job in the current Cabinet, she would certainly have a good chance of that position, if the Liberals retain government.

This would mean that we would lose our champion, and we all remember how bad things can get if the Minister does not give appropriate support to the industry.

But, equally, there is no certainty that Senator Conroy will become the Minister for Communications if Labor wins the election. My understanding is that he is genuinely interested in the portfolio but it would be up to a new Prime Minister to make the ministerial appointments.

So if a new Minister is appointed the industry would have to start from scratch. Telecoms is not an easy portfolio as it brings together rather complex technical, regulatory and political issues; and involves commercial and national interests across various disciplines, such as health, education, energy, communications, IT, science, etc.

The first year after the election will be crucial for the industry and it would be good if we had a Minister that we can rely on.

Lack of transparency
In the event of a Coalition victory it is to be hoped that the government has learned from projects such as Broadband Connect and Broadband Guarantee that a more genuine dialogue with the industry is needed, and that this should not take place behind closed DCITA doors.

I have grave doubts about this since, once again, the parameters set for the Expert Task Force for FttH are not transparent, leaving room for the possibility of negotiations taking place behind closed doors.

In the case of a Labor victory everything will hinge on the execution of the plan. They must be willing to consult with the industry and make any changes necessary to serve the country’s best interest.

So my questions are:

• In either case (a Liberal or Labor government) significant regulatory changes are required to safeguard the future large-scale national investments in telecoms infrastructure. Many countries see structural change as the basis for that process. How do the Coalition and Labor intend to go about achieving this?
• Can the Minister and the Senator tell us more about their personal commitment to the position of Minister for Communications?
• Can we expect an improvement on the cooperative models between the government and the industry in relation to their infrastructure plans? In the case of Labor, are they prepared to start afresh, with a genuine attitude of bilateral participation and collaboration.

Paul Budde

See also:
Australia - Government Broadband Policies
Australia - Government Policies - Federal Opposition Policies - 2001-2007
Australia - Structural Industry Changes
Europe - Structural Separation Developments – 2007
Australia - FttN plans from Telstra and competitors
Australia - FttH Market – Analyses
Roundtable - Strategies for Fibre-ing Australia

This entry was posted on Monday, September 24th, 2007 at 3:51 pm and is filed under BuddeBlog. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.