Has Conroy got the numbers for reforms?

Has Conroy got the numbers for reforms?

Summary: Getting Senator Stephen Conroy's regulatory reform for the telecommunications industry through the parliament would need support from the Senate. On Twisted Wire we ring around to see which parties are supportive and which are against.

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A couple of weeks ago Senator Stephen Conroy announced regulatory reform for the telecommunications industry. It encouraged Telstra to voluntarily structurally separate its wholesale and retail divisions, or be forced to functionally separate and relinquish their shares in Foxtel.

This would require changes to telecommunications legislation, so it is dependent on getting bills through parliament. Nick Minichin has made it clear the Opposition is not behind the reforms, so getting them through the Senate depends on the support of the Greens, independents and, perhaps, the Nationals.

So, has he got the numbers? On this week's Twisted Wire I do a ring around to see which parties are supportive and which are against. You'll hear from:

  • Senator Nick Xenophon, Independent senator for South Australia
  • Senator Scott Ludlum, the Australian Greens
  • Senator Barnaby Joyce, leader of the Nationals in the Senate

I've also been through the Twisted Wire archives to grab sound bites from Stephen Conroy, Nick Minichin and the Liberal party's newest member.

A transcript of this week's edition of Twisted Wire can be found on page two.

Topics: Government AU, Telcos, Telstra

About

Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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18 comments
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  • An each-way bet?

    Senator Xenaphon will probably vote yes. Senator Ludlam will most likely vote no. Senator Joyce - not sure. He's so unpredictable at the best of times. If his reputation to going against party lines is anything to go by then expect him to vote yes but at the moment he's a 5 bob each way bet.
    anonymous
  • The NBN again...

    The ignorance and arrogance of these morons continues to take the breath away of anyone who has actually dared to solicit a view of how the real world solved or avoided these self inflicted problems years or decades ago.
    Did I actually hear the rhetorical question "how did Telstra get to be so dominant"? For friggs sake, you must be joking! How? Because my dear fellow citizens, our government (on both sides) made it that way so that they could extort the maximum price for it when they marketed their jewel in crown asset to you and I. Now that we have been raped and plundered, the propaganda machine that would make Joseph Gobels blush is being used to convince us that pillage, the final insult, will actually be good for us. Think I'm being a little dramatic? When last did you hear about the governments plan for restructuring Rio Tinto or BHP. Of course you haven't, so how come are we supposed to accept the unthinkable being done to shareholders in Telstra. This is blatant blackmail and you and I, those who were convinced with massive taxpayer funded marketing campaigns to buy those Telstra shares, who will pay for their incompetance and greed again. No sorry Mr Conroy et al, Telstra is a public company owned by shareholders operating in an environment which has determined its value according to the free market principals that operate in a democracy. You may not blackmail this company with quite illegal threats and countless violations of law from asset stripping and denial of the right to compete in the market. You created what we have and sold it to us, now you want to break it up now that you have my money. I don't think so. Give me back my $8 per share that I invested in the regulatory environment you created to get that $8 per share and once you own the company again, you can do whatever the hell you want with it. I will not be blackmailed by the government or anyone else, why, because it's illegal, that's why.
    anonymous
  • Nationals will back Conroy

    If the Nationals stick with the mood of their constituents (typically the rural population) and not do some dodgy back room dancing with Malcolm and the boys, then I suspect we'll see Conroy get the nod.

    Telstra is a dirty word out here in the bush. Having worked in IT in rural areas all my life, I can comfortably say I have yet to meet a single farmer with one kind word for them. Change is needed, and i suspect the Nationals will be feeling the pressure to agree.
    anonymous
  • Want to fix the problem...

    "We don't want duplicate infrastructure" Did I hear this right? Gaargh strewth, you have got to be kidding. At what time in gestation is the assumption of monopoly supply implanted into the Australian genome?
    Anyone who has ever departed "gurt by sea" and entered the real world thus learning that broadband is actually 20Mbps upwards, will also have noticed that the places where access is fastest and prices are lowest are those places where several INFRASTRUCTURE options are available. To avoid the tired old excuse of "but we have so few people in Australia" lets take a look at small town nowhere above the arctic circle in Alaska. No less than 4, yes FOUR competing infrastructure. Satellite, cable, DSL and wireless. NOT all national players, the cable and wireless businesses are local, successful and have multiple revenue streams. What, I hear you say, does that mean?
    Well, in the real world, one where competition laws actually exist and are enforced unlike the ACCC which is a farce at taxpayer expense, telecommunications infrastructure is supported by multiple revenue streams to provide the financial return needed to justify the investment. Typically, this is pay TV, broadband and voice.
    Not only did our governments monumentally screw up to line their own pockets with the creation of Telstra by combining Telecom with OTC and jettisoning the government owned financial basket case Aussat to the mislead and deceived Optus, but when pay TV came around (40 years after the real world) the government disregarded those 40 years of experience and pretended that "gurt by sea" was the first place to even get pay TV. They handed out monopolies (regional and urban separation) which, surprise, denied pay TV programming access to cable companies. There is a good reason why exclusivity and monopoly actions are illegal - only they are not it seems when the government sells exemption for a fortune.
    No revenue stream, no income, no investment, no competitive telecommunications network and hey presto you create a vacuum which the incumbent is not keen to address - why should he?
    Having murdered cable just as it was becoming that second competitive telecommunications string worldwide, not quite finished screwing up the future, our governments then auctioned all of our wireless spectrum to, you guessed it, create another monopoly which, conveniently timed to coincide with the dotcom crash ensured that the beloved Telstra faced no possibility of any competitive forces until WELL after it was sold off.
    So how to solve the problem.
    Easy!, No, not the creation of another monopoly - billions of dollars and 15 years of failure in that department should steer us well away from that. Just do what has been so successful all over the world. "Gurt by sea" does not defy the laws of economics.
    Simply create the environment needed to attract infrastructure based competition and it will flood in and solve the problem at no cost to the taxpayer, effectively, efficiently and quickly.
    Regulate utility pole and duct prices and create a national facilities access regime.
    Outlaw exclusive pay TV programming (just like the rest of the world)
    Learn from how other countries solved these issues decades ago.
    Let the market operate as the market was designed and get the government out of manipulating and controlling things that their appalling track record should keep them miles away from.

    The solution is simple and proven worldwide.

    One last thought Mr Greens party who thinks that monopolies are good. Why don't we take the NBN idea across the whole economy. We could start by structurally separating Coles, Woolworths, IGA, Spar, Foodland etc and create massive state run grocery warehouses. This way we would avoid the need to duplicate shopping centre infrastructure and free up all that land so that cheap housing could be built for the masses. Then we could invite the Chinese communist party to inspect our socialist workers paradise...See how stupid it sounds. Pleeease...
    anonymous
  • Blackmail Aus style.

    Garth got a little story for you.

    Last time I was in New York the go by the street robbers was to walk up behind you, put a gun to your head and say " Do you want to give me all your money".

    True he gives you a choice Garth but most choose to 'give" the gunman all their money.

    Reminds me of Mr Conroy and Telstra.
    anonymous
  • Blackmail to some, Competition to most...

    I think the sooner you bitter shareholders admit defeat, the sooner you can experience what true "competition" actually means.
    anonymous
  • justice government style

    Sydney i have a little story for you too...

    the reason the government has a gun to the head of Telstra is because they are not a robber as suggested, they are undercover police and have just made the biggest "bust" in Australian telecommunications history!!! Telstra is the bad guy (the true robber) who has been "holding a gun" to the Australian people and the competition for the past umpteen years and the government has finally woken up to this, gathered enough evidence (and balls) and is now holding the gun to Telstra's head for a reason... to break them up from the inside and to get some justice for the 20 odd million people who don't own Telstra shares so that everyone is on an equal foot and true competition prevails!

    shares have risks, re-read the prospectus and if they say in there that their is no risk due to changes in regulation and governments etc then you have a leg to stand on, but as you know they don't, so stop complaining.

    oh and Garth you could have always sold your shares... you could have already done that along time ago when the price was higher, but you chose to hold onto them and they dropped to historic lows under the previous Telstra boards regime... you don't always win with shares so get over it... it was your choice to hold onto them... so the blame lies with you on that one.

    in the end change is good and imo is required to fix a long standing problem int he industry!

    enough said!
    anonymous
  • Read the prospectus/disclaimer...

    Garth a lot of what you say makes obvious sense! You have put a lot of thought into your posts!

    So it's a shame you didn't do likewise and weren't quite so prophetic prior to purchasing TLS at $8 per share, by realising the full implications and what could occur!

    Of course the government fluffed up Telstra and made it attractive, as do all people who are selling, that's basic common practice. You'd do the same when selling a car, house, business etc. But on the other side of the coin, you don't hear CBA shareholders whinging (when their initial IPO was what, $3 and they are now $50) that the government fluffed them up though, eh? Curious!

    What TLS shareholders always seem to conveniently overlook, is, that regulations which apply to Telstra were outlined in the prospectuses. But even if you bought (as it would seem obvious @ $8) "on market", via your broker or directly via say ComSec (as I do), either your Broker has a lot to answer for or???

    Here's part of ComSec disclaimer -

    4. Investment in securities involves risk. Share prices rise and fall. The payment of dividends and the return of capital are not guaranteed. Past performance is not indicative of future performance.

    5. The information on this site has been prepared without taking account of the objectives, financial situation or needs of any particular individual. For this reason, any individual should, before acting on the information on this site, consider the appropriateness of the information, having regard to the individual's objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

    Again, I'm not here to argue with you or bag you Garth, just to say - all the warnings were and are there!

    So it's time all TLS shareholders realised where the buck stops and it isn't with the government (past or present) ACCC or anyone else... guess who?

    Oh and Garth they aren't restructuring BHP or RIO, because they didn't inherit a ready made monopoly from the taxpayer!
    anonymous
  • Bought Telstra shares...you must be kidding

    Just to declare my position, I never bought Telstra shares - I would never have done such a stupid thing in a blind fit.
    I was/am in the industry during the whole period of "deregulation". I recognised clearly the monumental stupidity of government going down the path that inevitably led to the fiasco we have today. I personally met with two communications ministers, local MP's, Senators and literally lived in the ACCC for 3 years.
    It was all to no avail, the fools did not have a clue about how to establish or maintain a competitive telecommunications market. Worse, they had no interest in doing anything that detracted from the premium that could be extracted from Telstra as a monopoly to the point of stating that they would "change law" to boost the value of "their" asset.
    Sadly, these same troglodytes are still manipulating an industry well beyond their capabilities.
    I live in regional Australia and come into contact with people every day who invested in Telstra off the back of the hype that the government created to drive that "premium". People who had no way to know that they were being manipulated by their own government. These are the people I feel sorry for, those that were expecting to live off this wonderful investment in their retirement.

    Buy Telstra shares or believe in the NBN... you've got to be kidding!
    anonymous
  • It works both ways

    What about the turret of 18 inch guns Telstra's had at the back of their customer's heads for years?
    anonymous
  • The harsh reality

    its simple for the poor people you are referring to who purchased Telstra shares... if you do not read a prospectus properly and do enough research then you should not buy a share in a company you have done little to no research and you only have yourself to blame. That's the harsh reality.

    Shares can obviously go either way (i have had winners and losers too) but if you see a share go down its your responsibility and yours only to either hold onto it, or choose to sell it

    in the end it comes down to the shareholders responsibility, and the only person they can blame for any losses is themselves.

    its time to move on.
    anonymous
  • re Bought Telstra shares...you must be kidding

    Garth these were your words just a few posts back :-

    " Give me back my $8 per share that I invested in the regulatory environment you created to get that $8 per share and once you own the company again, you can do whatever the hell you want with it. "

    Now you are saying:-

    "Just to declare my position, I never bought Telstra shares - I would never have done such a stupid thing in a blind fit.

    Am I misreading the comments here, or are you speaking double dutch ?
    anonymous
  • Conroy & Telstra

    Maybe all Telstra shareholders should start a class action against the government over the proposed break up of Telstra. I'm sure that there are some litigation lawyers who would be happy to help.
    anonymous
  • telstra and lawyers, what a combo

    that's the telstra spirit. when in doubt whip the lawyers out.

    another nail in the telstra coffin, as that will make more people despise telstra.
    anonymous
  • re telstra and lawyers, what a combo

    Yeah good call, just lay down and let the Government walk all over you. Could be a precedent for future Government intervention towards other Australian companies. Woolies for example not only rip us off at the pumps, but hold licences for many 000's of Poker Machines nationwide. (What a fantastic Aussie company they are, as a comparison to the much despised Telstra ?)
    anonymous
  • re re

    other Aus companies didn't get a taxpayer funder licence to print money. but you just answered your own stupid comment. sell your shares and buy woolies. it aint nuclear physics.
    anonymous
  • funny eh

    you know, as someone who spent 3 years calling rural aussies FOR telstra, I can honestly say theres more positive than negative. they understand the realities.
    anonymous
  • re re re

    I thought his comment was reasonable, and that your reply was the stupid one.
    anonymous