Telstra rejects Aussie gov calls for split The incumbent Australian telco Telstra is unimpressed with broadband minister Stephen Conroy's calls for reform and the possible division of the company up into retail and wholesale businesses. Legislation aims to strengthen consumer protection by reinforcing the Universal Service Obligation and Customer Service Guarantee. …
It has been obvious (even to Blind Freddy) that Telstra must be split up. And to almost everyone's utter amazment, the proposal from Conroy is almost exactly right. Clearly it isn't his own work.
Basically it addresses the appalling error made when Telstra was first sold off (well sold to the Oz public, who probably thought that they already owned it.) The error being that Telstra retained both retail and wholesale operations in the one company. Most critically it owned the copper in the ground. Cynically one might observe that Telstra was not worth nearly as much on the open market if it didn't retain its near monopoly on infrastructure, so no doubt Treasury was lobbying very hard to ensure that the company wasn't carved up, even though the best outcome for the Oz residents was the converse. So now the only losers will be the poor fools that bought Telstra shares in the first place. They are demanding compensation for the loss in value of their shares should the carve up go ahead. On the basis that although they will have shares in both operations, the sum is worth less than the origional - because it ceases to be able play monopoly bully. It is hard to have much sympathy.
The parallel thread of the 40+ billion dollar fibre rollout however makes less sense if Telstra are carved up. Which might be a good thing, since it is essentially a $2,000 per person tax to provide little more than video on demand services. Which no doubt the punters will have to pay the providers for anyway. So maybe the concomittant good effects of carving Telstra up will free them from the full cost of the fibre rollout, and they can slowly let it die. Which would be the proverbial good thing. It is very possibly one of the worst ideas to have come out of our government in years.
Telstra's behaviour is akin to Microsoft--arrogant, greedy, and couldn’t care less about the customer: essentially an almost absolute monopoly with only bit players for competition. Telstra exercises by far the greatest control over Australia's telecommunications distribution network for which other Telcos have to come a begging for access.
For readers who don't know of Telstra or who have never experienced this ugly unpleasant corporation first hand, it's very difficult to explain in just a few words how much trouble a customer can experience with this Telco and still sound rational and coherent. Just last week Telstra emptied the full amount of top-up credit I'd put into my prepaid mobile cell phone only a month earlier without me even making one phone call. A month previously it did exactly the same except then the remaining credit was three times as much--about $60.
Several months earlier I was completely unsuccessful in trying to resolve both account issues and why my cell phone had been disconnected from the network whilst my account was well in credit. For my efforts I got absolutely nowhere except to be transferred over 17 times--eventually I lost count--only at the end to be transferred to a 'dead' line which was not answered. After a few hours of getting absolutely nowhere with Telstra's Customer Lack-O-Service, I began to sound like the recording of that British guy [that's doing the email rounds] whose unrelenting tirade against a British Telecom telemarketer will go down in history as a classic.
This was not the first time either that Telstra had cut off my service whilst my account was in credit, the same thing happened several months earlier when its accounts registration server previously spat the dummy. Of course, there was no apology--no extra credits for the service being down--or for the 'non-functioning' [useless] customer service, nothing. Customer Service even refused to send me an itemised account through the mail.
…Moreover, that's just the most recent mobile service I've had--for similar reasons two others have bitten the dust in the last couple of years through Telstra's inability to provide me with even a modicum of customer service. And I can't even begin to tell you of the problems I've had with my fixed line services over the past 20 years or so except to say that I've been charged thousands for services which were not delivered--problems which have never been resolved.
Through delays, multiple transfers, having to deal with incompetent customer service staff or those who simply don't have the authority to act to solve the problem, Telstra wears its customers into the ground to the point where they simply give up. The stamina and effort needed to keep complaining has to be of Herculean proportions. Presumably, there's a secret report somewhere inside Telstra that provides the cost benefit figures in taking such an aggressive approach with its customers.
Last week's stuff-up was just the last straw. When I found Telstra had nobbled my account yet again by reducing its balance to zero, I was so annoyed that I chucked the phone full force at a brick wall, now its LCD is smashed to pieces. Problem solved: no phone, no phone account, and eventually I'll get over not having a cell phone.
The fact is it's the Australian Government that's wholly responsible for the Telstra debacle. In its greedy grab for money, the Government sold off, holus bolus, what was once part of the PMG--Postmaster General's Dept (later aka Telecom Australia) without any effective regulation to control its wayward child (as tight regulation or properly managed deregulation would have reduced the share price).
Moreover, everything was sold off as a single entity; this tragically also included the intracity and intercity cableways and their rights of way. Throughout the towns and cities across Australia--a sparse and difficult land to service--a massive public infrastructure that took about 130 years to build just fell out of public ownership--and thus also out of public control.
Any reasonable, rational or independent assessment of the Government's decision to include its divestment of the Telecommunications cable network infrastructure along with the sale of Telstra would have to conclude that not only was the decision cold-blooded, negligent and self-serving but also that it was much more than the typical 'legalised misfeasance' committed by disingenuous governments everywhere. Rather, it was on such a scale as to amount to a grand malfeasance committed against the Australian people, and an action which will eventually cost Australia many times over the income from the initial sell-off, and that it will also take many years to fully rectify.
Selling off the cableways meant that Telstra's competitors (a) had to negotiate new access and rights of way for their cables right across Australia and then build a new telecommunications cable network infrastructure from scratch to compete and run in parallel with that of Telstra's; and/or (b) buy access to the now-Telstra-owned cable network at wholesale rates far in excess of the rates which would have been charged by a Government owned revenue-neutral utilitarian 'Telecommunications Cable Authority'.
Building a parallel cable infrastructure across Australia to cover the same service area as that of Telstra is a truly daunting and monumentally expensive task in a country with an area roughly the same size as the continental USA but with about one fourteenth the population. To date, only part of the network has been duplicated by other telcos [mainly Optus], and only in profitable areas such as in the inner city and intra-city links.
To date, the alternative of the smaller telcos buying access to the Telstra cable network has proved divisive and problematic. Needless to say, Telstra doesn't relish its competitors using its cableways (with their rights of access), and concomitantly, in Australia, communications prices and charges are outrageously and exorbitantly high.
With Australian telecommunications prices remaining so high through the lack of effective competition, and with the installation of optical fibre to the 'last mile' still basically at a standstill, let alone fibre directly to the home--an advanced telecommunications infrastructure for Australia was essentially just a pipedream until this announcement. Eventually, the inept and bungling Government had to do something to reign in the out-of-control, metastasising Telstra, thus Minister Conroy's statement of yesterday.
That the Government was ever initially allowed to get away with such a huge debacle as selling Telstra, and now with the prospect of having to buy at least parts of it back at many more times its initial value (as part of its multi-billion dollar 'Broadband Initiative') says a lot about the Australian people.
Perhaps the characteristic indifference and apathetic attitude that most Australians traditionally exhibit towards matters of their governance (and concomitantly their failure to act over the Telstra debacle) is best summed up by large hand painted graffiti, which for over twenty years adorned a high brick fence that surrounded a racecourse not far from my home. It read:
"The Australian People are bloody-mined sheep."
Recently, redevelopment gobbled up the message but in all the years it blazoned across the wall by a busy intersection with traffic lights and a nearby bus stop, not one person bothered to deface or alter the message in any way. Perhaps therein lies the real reason for the Telstra debacle.
Conroy is dangerously stupid paired with KRudd.
We in Australia are watching things lurch from idiocy to the ludicrous - the 43 Billion Dollar NBN (National Broadband Network) is going to cost another 20 Billion once they figure out that running wires on telegraph poles is simply short-sighted. (in Australia Telstra owns and maintains 98% of the hardware and infrastructure of the country, which given the distance and size of Australia makes it the largest provider of it's kind in the world - yep a world leader).
Telstra now answers to it's shareholders, and the government will be in the High Court for a long time explaining why now it's stuffed up the roll-out of the NBN some four years ago (1.4 Billion given to Optus and it's consortium).
Why on earth would Telstra invest in new hardware and infrastructure if the next short-sighted political light-weight thinks he can carve it up for the rest of the market (who incidentally have not installed any meaningful infrastructure in years). - You will only see and OPTUS Van in the country if it's either lost or stolen.
Telstra is the only company maintaining and servicing infrastructure in Australia - let's see the rest have a go? With the majority of of our population (and easy money) on the east coast no other company is prepared to make any investment in the future.
Telstra is a company - if the government wants to make the game fair - then another multinational company needs to decide on it's infrastructure solution for twenty million people and to pay for it themselves...
no apologies for length - just sick of the BS
"once they figure out that running wires on telegraph poles is simply short-sighted."
What would you do? You can't use wireless as there's not enough radio spectrum.
In above, if you really mean 'wires'-Cu then I'd agree with you. Presumably you mean fibre.
"in Australia Telstra owns and maintains 98% of the hardware and infrastructure of the country, which given the distance and size of Australia makes it the largest provider of it's kind in the world - yep a world leader"
Correct, but Telstra should not own it.
The distribution system should have remained in the hands of the Govt. as a revenue-neutral utility. There are many models for stopping such a utility from becoming an inefficient dept. such as having large users with board members on the utility and voting with respect to funding priorities etc.
The main issue is to get the distribution network back out of Telstra's hands--back to the Australian people where it belongs. We couldn’t care less about the exchanges, retail etc. let Telstra keep that--then they'll be on par with other providers.
"Telstra now answers to it's shareholders, and the government will be in the High Court for a long time explaining why now it's stuffed up the roll-out of the NBN some four years ago (1.4 Billion given to Optus and it's consortium)."
Agreed. In other countries the citizenry would be rioting in the streets by now if the government had done what the Australian Govt. did with the Telstra sell-off.
It's a disgraceful tragedy. And we idiot citizens let the Cretins in Canberra do it.
"Why on earth would Telstra invest in new hardware and infrastructure if the next short-sighted political light-weight thinks he can carve it up for the rest of the market (who incidentally have not installed any meaningful infrastructure in years). - You will only see and OPTUS Van in the country if it's either lost or stolen."
Who cares what Telstra does if the distribution infrastructure is back in the hands of the Australian public? Presumably only Telstra shareholders. (And thankfully I'm not one of them.)
"Telstra is the only company maintaining and servicing infrastructure in Australia - let's see the rest have a go? With the majority of of our population (and easy money) on the east coast no other company is prepared to make any investment in the future."
Telstra doesn’t do much maintenance--ask all the ex Telstra employees [no, I've never been one.]
The effective level of service (line maintenance etc) since Telstra took over the network has dropped substantially. (I could provide pages of examples.)
"Telstra is a company - if the government wants to make the game fair - then another multinational company needs to decide on it's infrastructure solution for twenty million people and to pay for it themselves..."
None would bother. It would be insane for large multinational to try and replicate the 130 or so years of infrastructural development in the network. That's why we need the distribution network back in public ownership.
THERE IS NO OTHER WAY--OTHER THAN PERHAPS PAY AN ORDER OF MAGNITUDE MORE FOR OUR TELECOM COSTS THAN CITIZENS DO IN OTHER COMPARABLE COUNTRIES.
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