Telstra mocks Labor's broadband plan
Telstra mocks Labor's broadband planBy Jennifer Hewett
December 07, 2007 12:00pm
TELSTRA has bluntly rejected the new Government's proposal for a partnership to build a national broadband network, jeopardising Labor's ambitious agenda for a broadband and education revolution.
Telstra chief executive Sol Trujillo told The Australian yesterday that the company would never agree to the Government's suggestion of a form of joint ownership, mocking it as some sort of "kumbaya, holding hands" theory.
"We are only going to participate in the things that we own and control," he said.
He also argued the new Government must direct the competition regulator to back off in terms of limiting the prices Telstra could charge. Instead, he insisted that the company would invest only on the basis that it could charge enough to ensure good returns for its shareholders.
The commitment to spend $4.7billion of public money to fund a new high-speed broadband network was central to Labor's election strategy. But the strong comments from Telstra signal there will be no let-up in the confrontation that marked its relationship with the Howard government and the regulator, the Australian Competition and Consumer Commission, over the past two years.
It is also likely to delay any rollout of the digital education revolution in computers and broadband approved by federal cabinet yesterday, with secondary schools able to apply for up to $1million in funding from March next year.
While Labor has not defined a precise ownership structure for a new broadband network, it is insisting it wants a shared equity investment, rather than just handing over the funds to one company or a consortium.
It is also concerned that the ACCC will effectively set the prices that can be charged for using the new network.
Mr Trujillo, firmly backed yesterday by chairman Donald McGauchie, said Telstra was happy to invest $4 billion or more of its own money rather than the taxpayers' - but only on its terms and pricing.
Communications Minister Stephen Conroy said last night Labor's position remained the same as the one it took to the election. "I expect Telstra to robustly defend its interests," he said, adding that Labor would soon announce an expert panel to decide the structure of the proposed broadband network.
Senator Conroy said the process would be completed by June.
But even the prospect of access to government funds will not alter Telstra's view that it must own and control the network, with Mr Trujillo saying any alternative ownership would only lead to confusion. "We don't want to muddy it up with what you can do and what you can't do and when," he said. "It makes managing your business too hard."
His comments came as Telstra suffered a stinging defeat in the Federal Court, which found it had misled mobile phone consumers when it said in advertisements that coverage for its Next G network was available "everywhere you need it".
"Telstra engaged, and continues to engage, in conduct that is misleading or deceptive," judge Michelle Gordon said in her ruling in the case, which was brought by the ACCC.
Mr Trujillo warned yesterday that without a major investment in broadband, the damage to the Australian economy would be severe and long-lasting. "I think there will be huge economic impacts for Australia because Australia will fall behind the rest of the world," he said.
According to Mr Trujillo, his own conversations with Kevin Rudd have made it clear that the new Prime Minister understands what is at stake.
But Mr Trujillo said that the Government had a choice to make. "The question is do you focus on process or do you focus on outcomes. That is the part that is yet to be determined," he said. "I am an optimist that Kevin Rudd wants to focus on outcomes. He wants to change education, he wants to change healthcare delivery, he wants to change a lot of things. To argue over technicalities versus getting the big outcomes is really the choice."
Labor is promising to use high-speed broadband to make the economy more efficient and to deliver all sorts of services, such as networked schools and its new computer program for students, along with improved healthcare programs.
During the campaign, Labor avoided detailing how its proposal would work in practice, beyond expressing confidence it would be able to work with Telstra or other telcos when in government. But while an alternative G9 group led by Optus will also tender for the proposed new fibre network, it would need to make use of some Telstra facilities, which Telstra has made it plain it will continue to fight vigorously.
Labor has in the past also privately conceded that Telstra is the logical and easiest option to build a new network.
Telstra mocks Labor's broadband planBy Jennifer Hewett
December 07, 2007 12:00pm
TELSTRA has bluntly rejected the new Government's proposal for a partnership to build a national broadband network, jeopardising Labor's ambitious agenda for a broadband and education revolution.
Telstra chief executive Sol Trujillo told The Australian yesterday that the company would never agree to the Government's suggestion of a form of joint ownership, mocking it as some sort of "kumbaya, holding hands" theory.
"We are only going to participate in the things that we own and control," he said.
He also argued the new Government must direct the competition regulator to back off in terms of limiting the prices Telstra could charge. Instead, he insisted that the company would invest only on the basis that it could charge enough to ensure good returns for its shareholders.
The commitment to spend $4.7billion of public money to fund a new high-speed broadband network was central to Labor's election strategy. But the strong comments from Telstra signal there will be no let-up in the confrontation that marked its relationship with the Howard government and the regulator, the Australian Competition and Consumer Commission, over the past two years.
It is also likely to delay any rollout of the digital education revolution in computers and broadband approved by federal cabinet yesterday, with secondary schools able to apply for up to $1million in funding from March next year.
While Labor has not defined a precise ownership structure for a new broadband network, it is insisting it wants a shared equity investment, rather than just handing over the funds to one company or a consortium.
It is also concerned that the ACCC will effectively set the prices that can be charged for using the new network.
Mr Trujillo, firmly backed yesterday by chairman Donald McGauchie, said Telstra was happy to invest $4 billion or more of its own money rather than the taxpayers' - but only on its terms and pricing.
Communications Minister Stephen Conroy said last night Labor's position remained the same as the one it took to the election. "I expect Telstra to robustly defend its interests," he said, adding that Labor would soon announce an expert panel to decide the structure of the proposed broadband network.
Senator Conroy said the process would be completed by June.
But even the prospect of access to government funds will not alter Telstra's view that it must own and control the network, with Mr Trujillo saying any alternative ownership would only lead to confusion. "We don't want to muddy it up with what you can do and what you can't do and when," he said. "It makes managing your business too hard."
His comments came as Telstra suffered a stinging defeat in the Federal Court, which found it had misled mobile phone consumers when it said in advertisements that coverage for its Next G network was available "everywhere you need it".
"Telstra engaged, and continues to engage, in conduct that is misleading or deceptive," judge Michelle Gordon said in her ruling in the case, which was brought by the ACCC.
Mr Trujillo warned yesterday that without a major investment in broadband, the damage to the Australian economy would be severe and long-lasting. "I think there will be huge economic impacts for Australia because Australia will fall behind the rest of the world," he said.
According to Mr Trujillo, his own conversations with Kevin Rudd have made it clear that the new Prime Minister understands what is at stake.
But Mr Trujillo said that the Government had a choice to make. "The question is do you focus on process or do you focus on outcomes. That is the part that is yet to be determined," he said. "I am an optimist that Kevin Rudd wants to focus on outcomes. He wants to change education, he wants to change healthcare delivery, he wants to change a lot of things. To argue over technicalities versus getting the big outcomes is really the choice."
Labor is promising to use high-speed broadband to make the economy more efficient and to deliver all sorts of services, such as networked schools and its new computer program for students, along with improved healthcare programs.
During the campaign, Labor avoided detailing how its proposal would work in practice, beyond expressing confidence it would be able to work with Telstra or other telcos when in government. But while an alternative G9 group led by Optus will also tender for the proposed new fibre network, it would need to make use of some Telstra facilities, which Telstra has made it plain it will continue to fight vigorously.
Labor has in the past also privately conceded that Telstra is the logical and easiest option to build a new network.
