A Labor victory – what’s next for the telecoms industry?.
Now that we have the Labor victory it will be very interesting to see how the broadband policies are further developed – and, even more importantly, how they will be executed.
This election certainly put broadband on the national agenda; there aren’t many other countries in the world where this important element of national infrastructure has been so widely debated.
The subject has generated very heated discussion because the stakes are extremely high. In one way or another some $5 billion worth of direct or indirect government spending is at stake, and who wouldn’t want a share of that?
All the signs indicate that the new government is willing to sit down with the industry and discuss how to proceed from here. Broad outlines of the plans are in place and there is general agreement between the new government and most players in the industry – and, importantly, there is room for discussion.
The industry should be able to harness this unique level of goodwill and use it to the advantage of, not just the industry, but of the whole country. Again, there is broad agreement that the best solution for the country is also the best solution for the industry.
High on the industry agenda is a high-level FttH vision and the industry will shortly present the new Minister, Stephen Conroy, with an industry vision. This has been developed over the last month and will include ideas and suggestions for an infrastructure that supports e-health applications (video monitoring of patients, elderly people, remote diagnostics); smart grid (linking the electricity network to broadband, allowing utilities and their customers to save energy); and tele-education – as well as e-entertainment, of course.
It will be very interesting to see if Telstra is prepared to play ball. This would mean the incumbent accepting the new government’s open networks concept and genuinely working with the government and the industry towards solutions that are good for the country, for competition and for innovation.
That would be a massive turnaround for Telstra.
But if it doesn’t play ball its situation will be worse under this new government, and we can expect all-out war – a war even bigger than the one it waged under the previous administration. This will make it extremely difficult for the Labor government to speedily implement their plans. In the worst case scenario it could take it three years to execute its FttN plan. This would be disastrous for the government and would reflect badly on a policy that was a major part of its campaign. Ministers and bureaucrats would be dragged through the courts as Telstra is expected to continue to try to hold onto its monopoly.
Nothing less than very, very tough structural separation legislation will ensure Labor’s capacity to execute its plans under such a scenario, but even this could take at least a year, which would again undermine Labor’s promise to start rolling out in 2008.
There is still a reasonable chance that Telstra will pre-empt all of this and announce its own structural separation, since this could be most financially lucrative for the management team. But to date they have indicated that they prefer a vertically-integrated future.
Now is the time to ensure that we make use of the lessons learned in 2007, and that the potential economic and social benefits are included in the next part of the process of building the new national infrastructure. This new government will begin to lay the foundation for the national infrastructure that will be with us for the next 25 years, so we need to get it right.
Paul Budde
See also: Australia Government Policies
