Conroy's 'red underpants' comment made sense: US analyst

Communications Minister Stephen Conroy's comments about having "unfettered legal power" to make spectrum bidders wear red underpants on their heads made sense in the context, according to one US telecommunications analyst.

Conroy made the comment in New York last week at the Columbia Institute for Tele-Information Conference, boasting about the power that he wields in Australia.

"We are in the fortunate position that the regulation of telecommunications powers in Australia is exclusively federal," he said at the time.

"That means I am in charge of spectrum auctions, and if I say to everyone in this room, 'if you want to bid in our spectrum auction, you'd better wear red underpants on your head', I've got some news for you. You'll be wearing them on your head."

Shadow Communications Minister Malcolm Turnbull accused Conroy of being a "control freak" in response.

But according to US telecommunications analyst Fred R Goldstein, posting on Australian telecommunications analyst Paul Budde's blog, the comments were "taken out of context" in a similar way to US President Barack Obama's comments about building road infrastructure , which were taken out of context to suggest that governments build businesses.

Goldstein said that in the US, power over telecommunications law is split between the federal government, the states, and the courts, so Conroy's statement was a good explanation.

"Conroy was noting that in [Australia], there is no state regulation for him to contend with, and he's not kowtowing to the [International Telecommunication Union] either. So it's all federal regulation. That was meant to reassure people that the ITU wasn't going to mess things up for Oz. So in context, he was right, and it was perfectly reasonable for him to introduce a bit of jocularity," he said.

"It would not surprise me, then, if an Australian Linux distro called Red Underpants came out."

In Conroy's speech, he also indicated that the Australian government may seek to roll out its own Australia-US subsea fibre-optic cable if international capacity prices don't go down. NextDC board directors Bevan Slattery and Ted Pretty told industry publication Communications Day today that they are in the pre-planning stages for a new Australia-US link.

Conroy has indicated that he will see what comes of a number of projects in the offing before the government proceeds with its own cable.