Wednesday, April 08, 2009

Telstra - the witch is dead

Ian Verrender in today's Herald and Age:

"As a gesture in nation building, they don't come much grander than yesterday's announcement of a $43 billion investment in a national broadband network by the Prime Minister. But it also was a transforming moment for Telstra. No longer will the company control the fixed-line telecommunications network - its monopoly has been smashed, its market power shredded.

Putting aside technical and economic considerations for a moment, the new network will help rectify a glaring error made when John Howard and Nick Minchin sold Telstra to the public a decade ago.

Back then, Telstra should have been split, with one company selling telecommunications services and another owning the hardware. Instead, the Coalition government, eager to maximise returns, chose to sell the company intact with an overarching legal framework that would force Telstra to make its network available to competitors. The potential conflict was obvious from the outset and became a reality almost immediately."