Michael Sainsbury | September 02, 2008
TELSTRA is now in very real danger of being forced to split at least part of its network from its main business.
It's clear the Rudd-Conroy election promise is, if not in tatters, very frayed around the edges
That has always been a possibility, but the odds just got worse for the company, which has put its all into a relentless and often ugly campaign to stop just that.
Last week, as part of a major policy shift that went widely unreported, the federal Opposition once again threw its support behind a separate company for the planned $30 billion national broadband network.
The Coalition said it would do this in April but hardly anyone noticed, and its communications spokesman, the affable Bruce Billson, said so again last week.
"If you are going to spend that much public money you want commensurate public policy gains," Billson said last night. "We are honouring the T3 prospectus by undertaking no changes to Telstra operations as they now they stand."
A Government contribution to a network would obviously change that, he said.
At the very least, Australia's dominant telecommunications company will now face much stronger internal separation should it win the federal Government's troubled national broadband network tender.
The Coalition's broad position is now very similar to that of most of the senior leadership team in Kevin Rudd's Government, but it won't say that.
If the break-up happens, it will be a major defeat for Telstra's aggressive regulatory protagonists, which have been led by exiting Telstra communications boss Phil Burgess, and Tony Warren.
The hollow men of Kevin Rudd's office must be asking Communications Minister Stephen Conroy: "You made this sound so good, so clean and so easy - what happened?"
It's clear the Rudd-Conroy election promise is, if not in tatters, very frayed around the edges, and the fraying continue while the Government refuses to state its position on the critical issue of how to structure the network, if Telstra wins the bid.
Even Rudd is moving the goalposts. In parliament yesterday he upped the taxpayer contribution by a lazy $300 million.
"The Government will be investing $26 billion in road and rail infrastructure through 2008-09 to the end of the AusLink 2 period; $20 billion in infrastructure, through the Building Australia Fund, on transport and also on other key infrastructure priorities; up to $5 billion on a national high-speed broadband network."
$5 billion, really?
Last week, Billson asked Rudd this question: "Can the Prime Minister explain why his Government has failed to keep its election promise to complete a tender process for a national broadband network within six months of taking office?"
Rudd's answer was this: "The Government welcomes questions on education and the Government welcomes questions on infrastructure, because in both of theses areas we saw such a litany of inaction for 12 years.
"If you come to government, as we did in December last and we have been in government for less than nine months and you are confronted with the state of the broadband network in terms of speed and available bandwidth, then the requirement for government to act is huge.
"I constantly lost count of the number of attempts the previous government had at doing anything constructive about broadband. There were 18 separate proposals - 18 separate programs. It was impossible to follow them.
"All I know is that every community that I went to across regional Australia would say, in one of their first presentations to this Government, please do something on broadband because the previous government has let us down.
"Because we have embarked on such a significant national program involving potentially billions of dollars of public funds, we will go through the most rigorous, comprehensive public tender process to ensure that probity is honoured so we can get on with the business of rolling out this network.
"We are committed to a digital revolution in Australia. We are committed to a digital education revolution in Australia. It is the pathway to the future and we are confident of the progress we have made."
Really Kevin? Even Telstra wants clarity.
"Where regulation remains necessary we need a paradigm shift," Telstra's Tony Warren said at a conference last week.
"Around the world people are understanding that if you are going to need regulation you need to lock it in for a long time. You need to give investors certainty on what the regulatory bargain will be. I think this is fundamental."
Too right, Tony, too bloody right.