Telstra down but not out

Although you might still not encourage your mother to buy their shares, Telstra is down but not out.

A Labor win at the election could see Telstra hopeful for an agreement on the NBN. But according to CEO David Thodey:

It is a purely commercial issue and if we can get to an outcome we'd be delighted, if we can't we can't and life will go on.

On the other hand, an Opposition victory (which Tony Abbott appears to have personally hijacked) might prevent any plans to split Telstra's wholesale and retail operations.

But how does this really affect Telstra, and not just its legacy network?

David Thodey suggests that Telstra's wireless customer base is doubling every nine months:

 Telstra CEO David Thodey: Let me say it again, every nine months. Any of you out there would die to have a business like that.

And with Telstra continuing to improve the capabilities of its wireless infrastructure, once the fallout from the Three Amigos and the NBN negotiations has cleared, it seems plausible that Telstra will come out of it all just fine.

Either way, the NBN debate is giving Telstra enough breathing space to reposition its business. Ticky Fullerton's report on ABC's Lateline recently is worth a watch as it identifies some of the major issues for the election. No mention of how backward Australia is at the moment or how it will screw-up our future capabilities, though!

But in the meantime, speculation over the retail  price of the NBN services in Tasmania has prices ranging from $40-$90 per month - even some suggesting it is "too expensive". Given that I currently pay $109 per month to get quasi-reliable Wimax in Palmerston via Gungahlin (I gave up on the ADSL "service" just recently), if any Taswegians out there would like to swap, let me know via the post as my email may not be working...

Photo credits: Telstra sign: "Bidgee"/CC BY 3.0; David Thodey: Telstra.

Infrastructure Duplication? Duct structure is the problem, not the cable

Optus CEO Paul O'Sullivan has confirmed that the telco will support the "controversial "cherry-picker" levy to crimp the ability of Telstra and others to build high-speed networks in high-value, low-cost areas in competition with the NBN".

Singaporean Government-controlled Optus is obviously taking the opportunity to have a swipe at Telstra. But the out-dated natural monopoly argument still being used to prevent infrastructure duplication is a smoke-screen.

The idea is that duplicating infrastructure is inefficient and leads to unnecessary civic disruption and unsightly cables, boxes and so on. The early telegraph and telephone days are cited as proof of this problem.

But it is clear that where a provider has access to the duct structure or the poles (that is, the conduit), the provider is able to deploy wire or cable to connect consumers. Transact in Canberra is a prime example. 

Where Transact (through ACTEW) owns the power poles, consumers have access to the Transact's cable. If you live in Gungahlin, where the ACT Government rushed the development of the suburb's infrastructure through a variety of public-private joint ventures, you get, well, nothing.

So when Optus supports a measure designed to prevent the duplication of infrastructure, it is important to look closely at the argument against duplication.

Put simply, it is inefficient to duplicate the duct structure or the poles (the conduit), not the actual cable. Additional cables increase bandwidth. Additional conduits cause the problems experienced in the early days of the telegraph and the telephone.

Shara Evans at Market Clarity suggested at a broadband conference in Sydney last year that government could improve access to the duct structure by adding this component to all new road-building projects .at a fraction of the cost to do this as a separate project. As the road is built, so is the duct structure.

The main reason this doesn't happen already? The division of powers between the federal, state and local governments.

So the next time you hear Optus or any other telco arguing against "infrastructure duplication", the duct structure is the problem, not the cable.

Put simply, the interests supporting the new measures to avoid infrastructure duplication are worthy of further investigation. And to make matters worse, none of this even got a mention in the whole NBN debate.

NBN cheaper, but so is the politicking

Today's release of the National Broadband Network (NBN) report suggests that the NBN will cost taxpayers $5 billion less than the initial proposal and will be affordable for consumers with or without Telstra’s participation. This is good news for Australia. But the way Communications Minister Stephen Conroy is handling one of the most important events in 21st century nation-building is an absolute disgrace.

The long awaited report by KPMG and McKinsey was released at 1:30pm today after a budget-style lock-up of selected journalists. And this is where the problem with Conroy begins.

The NBN has the potential to put the "public" back into public policy-making. But with the current minister at the helm, all we seem to be getting is a one-size-fits-all solution dictated by policy-making elites.

Australia has one of the most modern democratic political systems in the world, yet citizen participation in policy processes is effectively blocked by elitist attitudes. Indeed, public consultation usually results in little more than a placebo to calm the masses rather than a deliberate attempt to understand what issues are actually in the "public interest".

The bill for neglecting Australia's communications infrastructure has finally arrived and while it is significantly cheaper, the sneaky manner in which publicly-funded reports are delivered by government is nothing short of tyranny.

To make matters worse, the government is delivering mixed messages. In response to the Government 2.0 Taskforce report recently, the government is suggesting that the use of new communications technologies (which will be enabled by the NBN) will “shift public sector culture and practice to make government information more accessible and usable [and] make government more consultative, participatory and transparent”.

It would seem that somebody forgot to tell Stephen Conroy.

The minister is doing everything possible to sabotage public involvement in the NBN's implementation. Today's cloak and dagger style meeting of Canberra's press elite is just an extension of what we have come to expect from a minister who wants to implement an Internet filter to censor what Australians can access on the Net before the NBN is even available.

But none of this is necessary. Any number of people involved in delivering services such as health and education know just how important access to the NBN will be in improving the efficiency and effectiveness of service delivery. But even the problems in these two areas are not being addressed by innovative practice or new ideas - giving more and more responsibility to the federal government is all the elites have been able to come up with so far. Maybe it is time someone else had a go.

Those educating young Australians know just how desperately Australia needs the NBN. In comparison to their counterparts in the UK, Canada and the US, Australian students are not only behind in accessing affordable and adequate communications services, but their involvement in creating, disseminating and accessing public goods such as open education and other information resources is about a decade behind. So much for the education revolution and preparing for the knowledge economy.

Further, education now ranks in the top 5 Australian export industries. In a country where the standard of living rests on major exports of unsustainable resources such as coal, the education industry provides the biggest opportunity for sustainable future prosperity. But without the NBN, our chances of continuing to grow our exports in this industry are effectively hamstrung.

While today’s government-funded report is nothing more than an expert opinion to back up the government's NBN proposal, the price tag and the expected increase in access to the infrastructure will provide welcome relief for the government. And few would doubt the report has been held back for so long for any reason other than political opportunism.

With Opposition Leader Tony Abbott speculating recently that the Coalition could deliver the NBN faster and cheaper, Conroy will be able to take a breath while the details of the 500 page report are being absorbed.

But don't be fooled into thinking that things will be better under a Coalition government. After all, Conroy says the Coalition were responsible for keeping Australia's communications infrastructure in the dark ages.

And this is one area where Conroy is actually right. Abbott and the Coalition will no doubt cut spending on the NBN or scrap the project altogether, and this would be tantamount to deliberately making Australia part of the developing world.

Prime Minister Kevin Rudd is well aware of the consequences of failure with the NBN, stating that he doesn’t “intend to be Prime Minister of Australia which consigns our 21st Century to a 20th Century technology”.

But none of this bodes well for the whole point of having the NBN – to enable citizens to have greater access to information and communication services.

Today’s NBN report “lock-up” harks back to convict times. In the information age, the way policy is being made is simply not good enough.

Australia needs the NBN, but it also needs a major attitude change from senior ministers such as Conroy. Public money belongs to the public and hiding information for political sensationalism is just plain wrong.

Don’t expect the public consultation that is planned to be conducted as part of the NBN rollout to be anything more than a farce. Consumers might be “the big winners”, but citizens are getting more of the same. So much for 21st century nation-building.

For further info, see  Delimiter's coverage here.

Photo of Stephen Conroy by Dr Ron from wikimedia.org. CC-By-SA