Labor or Liberal, it's Telstra's election

Labor or Liberal, it's Telstra's election

Summary: If there was ever evidence that the stoush over broadband had gotten personal, it came when Telstra's sour-grapes mentality led it to sue Helen Coonan, personally, for claimed procedural flaws in the OPEL contract.


If there was ever evidence that the stoush over broadband had gotten personal, it came when Telstra's sour-grapes mentality led it to sue Helen Coonan, personally, for claimed procedural flaws in the OPEL contract.

Telstra's effort to prove she is a lying, conniving cheat hit a major setback after the case was thrown out of Federal Court, but the country's most complaining telco may get another chance to stick it to the Senator after what is being held as a major victory by both camps.

That victory was Telstra's decision to flip on the ADSL switch at 211 rural exchanges, predominantly in Victoria and Queensland, whose residents can now get broadband for the first time (see the full list of exchanges here).

For the first time in a long time, Telstra is flipping switches rather than flipping the bird.

Telstra, of course, blames the government for the delay in delivering broadband to the good people of Booleroo Centre, Mypolonga, Orroroo, Ouse, Molyullah and other places with fun-to-say names.

However, looking beyond the finger-pointing this is great news for another completely different reason: for the first time in a long time, Telstra is flipping switches rather than flipping the bird.

The cynic in me, however, notes the surprising coincidence of this newfound agreement and the upcoming election.

Telstra has made no secret of its efforts to turn faster Facebook access into an election issue, and it has succeeded marvellously: "broadband" has even entered the lexicon of the nightly news anchors. Labor has used every news bite to slam Coonan's broadband plan, pushing a proposal that looks a lot like Telstra's own previous suggestion.

While Telstra continues to fight for its right to do as it wants, Senator Coonan has worked to convince the country that the Coalition-backed OPEL consortium is the right way forward. A media release issued by the Senator this week -- just before the caretaker period commenced -- highlighted a small win in the form of Optus's delivery of ADSL2+ to the Adelaide-area electorate of Boothby.

I'm not an expert on Adelaide geography, but a bit of sniffing tells me that the division of Boothby (PDF document), is a wealthy Liberal-leaning enclave covering 123 square kilometres immediately south of Adelaide proper. Its 90,184 active voters (if Wikipedia's entry is to be believed) are spread across around 40 suburbs. And if you read Coonan's release, you'll learn that just one of those suburbs -- Blackwood -- is actually getting ADSL2+.

Here we have a perfect example of how broadband has been politicised beyond belief: in an effort to score points for OPEL (which of course feeds off of Optus's success), the installation of just one DSLAM into just one exchange, in one suburb, is trumpeted as a political success for the Coalition.

Were we not in caretaker mode, we might anticipate more regular updates as Optus slowly totters across marginal electorates, dropping DSLAMs anywhere the Coalition needs a few votes.

In a huge irony, Telstra meanwhile is showing that it can, with the flick of a switch, bring broadband to more than 200 suburbs across the country. Its executives have already stated openly that they have hundreds more exchanges ready to go -- if the legislative environment suits its whim.

In true "the enemy of my enemy is my friend" style, Telstra's outspoken executives are naturally hoping for a Labor win so they have some less resistant politicians to work on.

And perhaps this is why they finally signed on the dotted line with the government rather than holding out -- to remind the world that it is still Telstra that carries the market force, and that it is still Telstra that will ultimately determine the speed with which ADSL2+ is rolled out.

For voters that care about broadband, that fact alone may be enough to convince many to put their weight with the company that has the power to get them faster BitTorrents, sooner rather than later.

Telstra would clearly relish a more-friendly Labor government (although Phil Burgess declined to confirm this explicitly when I asked him this question during a presentation earlier this year).

And, as far as the effort to broadband Australia goes, this show of power could lend real ammunition to the Labor camp. Voters, in the end, will be forced to choose between what is right, and what is faster; let's hope the right decision gets made in the end.

What do you think -- has Telstra managed to one-up Coonan by breaking the rural broadband drought? Would you prefer Telstra broadband everywhere faster, or competitive broadband in the longer term? How will the parties' broadband policies change your vote?

Topics: Telcos, Broadband, Government, Government AU, Telstra, IT Employment


Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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  • Answers to the Billion dollar question please.

    It is with some reluctance ( because of previous abuse) that I accept your kind offer to comment on the above article. It is becoming recognised by many experts that the actions of Helen Coonan, acting out of desperation and with no logical planning, will prove in the case of Opel to be a serious misadventure for her and the Howard Government.

    Telstra has had conditions of service delivery placed on its NextG network which the Government has, rightly, required for efficient delivery of the service. I ask what conditions do Opel have to comply to with regard to speed of build, distance delivery requirements to customers and what sanctions are in place should Opel re-neg on its obligations.

    I would not think these questions are frivolous when one considers the one billion dollars of public money involved. Also it is noted that Senator Coonan stated that Opel would match the Government gift with an injection of 900 million of Opel money. An Opel representative was quoted in the Press that the Howard Government was contributing 80% of cost of the project. How does this add up?

    Considering the scope for a disastrous misappropriation of public money would Senator Coonan be so kind as to respond to these questions.
  • It was an Optus announcement not an ADSL2+ announcement

    Your cynicism is well placed. Blackwood already has ADSL2+ provided by five other providers. Why is a Ministerial announcement necessary for Optus' arriving late on the scene.
  • Stick with it Sydney

    Sydney, I am a huge supporter of your comments and desire to put your thoughts in the public arena. Please keep posing your comments.

    Having worked in this field many years and directly involved in the design and rollout of many of the older services that people love to hate I know where you are coming from.

    Two of your comments above are spot on and do warrant further investigation although I doubt most publications are not too keen on doing anything that would be seen as pro-Telstra.
    1. Why does the Next G network, which is 100% privately funded, have conditions placed on it when the Opel network to date has had no mention of guarantees of coverage or delivery?
    2. I understand that the Opel investment will comprise of a shifting of existing services from Optus ownership to Opel ownership and will have only about $230M of new capital invested by them. This seems to correlate with your reference to 80% of funding coming from the taxpayers.
  • Lets get some facts staright

    I think people are forgetting that Opel will only receive the government funding after the network has started to be built and has passed government tests.

    As for NextG being subject to government scrutiny before the CDMA network gets switched off this is because the government contributed many millions of dollars to the CDMA network in rural areas where it was uneconomical for Telstra to roll out.
  • Facts staright?

    What are these government tests? this is the first I have seen this mentioned anywhere. Also as you know so much about the funding could you answer the question about the 80/20 split or this the truth to hard for your argue against.

    If the government assisted with CDMA rollout to uneconomical areas did they do the same for Next G as it seems to comer even more remote and uneconomical areas, many of which will never be covered by the Opel network?

    The government also contributed many millions of dollars to the Ford plant in Geelong Victoria (more then they contributed to the CDMA network). Ford made an announcement to close this and the government simply put their hands up and said there was nothing they could do, as with most other arguments, your argument highlights the inconsistencies in the way Telstra is treated.
  • Competition, Value, & Speed

    I want to see a system designed that inherently encourages competition.

    Thus I want to avoid a network which gives Telstra a greater monopoly - higher speed at double the price is not progress, especially when many people already choose far slower broadband products to keep their price down.

    All that said... we need some monopoly bits to our network... lets just minimise them being owned by the big players.
  • Australia at the crossroads

    Australia in the next few years must decide on wether they will remain reliant on the aging copper and keep a monopoly in Telstra's hands for the copper or to embrace a fibre technology for the country where there is currently no incumbent and all carriers have the ability to build their own. Stop talking politics and blaming Telstra for the issues and blame your everyone for the lack of investment.
  • Sink or swim time - only with Labor though

    Australia's size and low population make it impractical to roll out two wholesale networks and I believe Telstra knows this. It should never have been sold, but that's too late now.

    It has taken near on 100 years to lay the pipes for Australia's copper phone network. Now that it's been sold off the installation of fibre in those pipes is apparently uneconomical for Telstra to roll out. Unless they charge a fee that most Australians cannot afford. So say they..

    Labor, if it wins Govt. is prepared to pump $5 billion into implementing the fibre insertion.

    Therefore, if Telstra want to poke their pipes, increase their staff and position, beat their chest and increase their shareholders wealth, it would be wise to compromise on wholesale price.

    Do we want to join the 21st century or not? This turmoil is a once-a-hundred-years thing.

    Would Telstra cut their nose off to spite their face. Maybe.

    Pointless rolling out a nation wide service only to charge so much that only a few people could afford to use it.

    Therefore Telstra pipes + Labor promised public finance = You had better make it affordable for every Australian. Or forget it.

    Labor is telstra's last chance to get a public subsidy.

    So, do you want some return to shareholder? or not?

    Well, do ya? Do ya Potty.*

    *The phone company calls it POTS, but the rest of us laymen refer to it as Plain Old Telephone Service. Regardless of what we refer to it as, POTS or Plain Old Telephone Service, it is ultimately the same thing: regular phone lines used to carry normal vocal conversations.
  • Telstra and Broadband

    Lets face it; if Telstra get their way (and thats what they'll get with labors policy) they will get back the monopoly they want to dictate what we need. I find it amazing that Telstra can suddenly role out ADSL 2 in exchanges where their opposition has after losing the battle to prevent them. This alone should highlight the dangers in an unregulated monolith such as Telstra. It is Telstra and NOT the government that has held back Broadband in this country - fact.
    As for 3 G and CDMA the people who rely on CDMA phones really do have a legitimate gripe. Telstra has optimized its 3 G for Data speed and not concentrated on providing voice services. CDMA was a clever balance but the Data optimization reduces cell sizes so the users have legitimate complaint as does the funder of this network which is essential infrastructure for Rural Australia (Unlike the Ford car plant). The handsets Telstra are offering for its flagship 3 G network are all multimedia handsets and fragile ones at that. Not one robust simple voice handset is available. The lower cost handsets in the 3 G range offered are unreliable and of questionable quality.
    The Government made a huge mistake selling off all of Telstra. What should have happened is the government should has kept all of the core infrastructure (the copper lines and exchanges) and sold off the business units. Then Telstra would not be in the bullying position it is now where every competitor has to use some part of its network which it so readily neglects.
    The regulation of Telstra allows fair competition and has seen broadband speeds go up. I'm pretty sure if Telstra still had their way we would be still on ADSL and paying a premium for it. With regulation we have choice and competitive pricing (although looking at Telstras pricing I can't understand why anyone would use it).
  • Government ownership flawed

    Having the government inject their fund via way of capital investment means they take part ownership of a service when all the profits go to a single third party.

    The only way funding should be used if on a per active service subsidy, a $1B or $5B investment that goes into the hands of a single private company will simply replicate the monopoly environment that we all hate. Provide a rebate to any approved provider only when they connect the service and a client signs up for it.
  • New start.

    Andrew Styles... thank you for your encouraging remarks. You are kind.

    It is time for the true facts of the broadband situation in Australia to be examined honestly.
    Firstly, and understandably, most people who express hostility towards Telstra in all probability have interests, and support opponents of Telstra, that overshadow their ability to fairly judge Telstra.

    The size of the Australian market, being relatively small, does not allow for a large number of competitors to operate successfully without a subsidy to many from the Australian Government. It is apparent that irrespective of who wins the coming election the delivery of cash grants to keep uneconomic telecoms afloat will become less frequent.

    Should Labor win the election, Senator Conroy has issues a sobering warning to Opel that they are put on notice and are warned that Opel will need to be aware that they can expect fierce competition from the Government (and possible Telstra) partnership to give Australians the Fast Fibre Broadband Australians now demand.

    Let us all forget the gobbledygook rubbish about who in the past owned Telstra. It is an undeniable fact that Telstra is now owned by one and one half million Australians who purchased Telstra shares and Telstra must be managed as any other great Australian public company.

    Forget the demonizing of Sol or Phil or the other forty thousand Telstra employees and free Telstra of unfair restrictive regulation that are designed to allow uneconomic telecoms to survive purely by restricting Telstra and by the handout of public monies.
    People must realize that the weak can't be helped by pulling down the strong.

    It is also a fact that without world class Broadband for their education, Australian children will become the dunces of our world and as Mr Rudd and Senator Conroy rightly express, Australia must have this facility as soon as possible.

    Many thanks to ZDNet Australia for the gracious use of their good Offices that allow free expression of opinion for all.
  • How much would it cost under Telstra?

    "It is also a fact that without world class Broadband for their education, Australian children will become the dunces of our world and as Mr Rudd and Senator Conroy rightly express, Australia must have this facility as soon as possible. "

    Broadband that no one would be able to afford if Telstra got let off it leash. Look at the current Bigpond plans compared to most other isp's. Bigpond is nearly always the most expensive.

    Labor will not even release it's FTTN maps, with a pathetic excuse that it is claiming it has based its calculations on confidential Telstra network information. Perhaps Labor's maps don't even exist.
  • Cost & Network design

    Once again a one eyed anti-Telstra person raises the how much will it cost argument; the simple fact is that Telstra is the benchmark for all their competitors & the ACCC. Telstra drops their price, the ACCC steps in drops the price of the ULL and all of the other competitors follow suit. The simple fact is that compared to other services their service is reliable, stable and terrestrial broadband is available to 92% of the population at a uniform price. Others simply focus on profitable areas where they do not need to cross subsidise non-profitable areas.

    What has Optus done recently? Stopped selling phone and ADSL services in many areas because they are not profitable enough!

    Do you ever hear Optus, Soul, AAPT, Request, Primus, iiNet and others compare themselves with anyone other then Telstra?

    Labour are not releasing maps for a good reason, these were designed and paid for by Telstra, would you feed information to your competitors so they can benefit from your hard earned work? I request my clients sign a non-disclosure agreement when I design their networks, this ensures they do not simply go to a less educated company and copy my design without having to pay the engineers. If I was you instead of asking about a design that may never make it beyond theory I would be asking about the Opel network. Even after the contracts have been signed and the money effectively spent all we have been shown is a drawing that could have been done by my 6 year old.
  • Cant do much when half of the public dont care about the internet

    We cant do much. All we can do is wait and see

    Telstra needs to GO anyone that wants it does not understand ADSL
  • Telstra needs to go? Does not understand ADSL?

    Telstra needs to go is a comment only an uneducated cynic would say, how could anyone wish the demise of any Australian company, let alone one that is listed near the top of the ASX 200.

    Does not understand ADSL, are you talking about the electrical characteristics of ADSL or are you talking about what ADSL is used for or then again could it be that a throwing a couple of one liners gives you a delusion of grandeur?
  • Broadband and the facts

    You mention suddenly role out ADSL2 in exchanges, the simple fact is that they equipped ADSL2+ on almost every one of the 2500 exchanges with any ADSL at all, they recently switched on 200 due to the federal government getting around to agree to a funding scheme to compensate carriers who provide services in loss making areas. This had nothing to do with the opposition's desires.

    Telstra has increased the number of base stations from CDMA to Next G by around 500 to ensure BOTH VOICE & DATA coverage is on par or better then the CDMA network, your argument about data optimisation and reduced voice coverage is inaccurate. Telstra has repeatedly proved that users who chose an equivalent Next G device to their existing CDMA they will receive same or better coverage.

    As to handset choice they have been at the mercy of the manufacturers and you may recall when CDMA was first released it took Nokia about 18 months to release a handset and many other companies never released even one CDMA device. Telstra has gone out and have released their own branded devices to ensure there are several handset models available, including once that is toughened and will bounce on concrete without breaking. Yes the range is limited but as with any new service it will take time for manufacturers to see the benefits of releasing more models. Once again you may want to check your facts before commenting.

    I agree with the fact they should have acted differently in the privatisation of the company but do you really think having the public service manage and maintain the copper infrastructure and exchanges would have been any better or more efficient?

    New technology made speeds of up, competition made speeds go up, competition is driving prices down. Regulation is designed to ensure non-predatory actions by companies and not forcing companies to sell wholesale services that could easily be installed by any company that wants to or at a price that discourages investment by these same companies.

    And if read my comment below you will see that even your Telstra is too costly comment is ridiculous.
  • Lack of maps

    This raises a good point -- how can we trust either Telstra or Opel when there is just a complete lack of good maps out there? Nobody really knows what Australia will get (in terms of network coverage), no matter who wins the election -- so how can we make informed decisions either way? This would be particularly worrying out in rural areas where coverage and service equivalence have long been issues. Is this actually an election decide for any of you out there?
  • re: Lack of maps

    You do raise a good point David but you need to consider the difference between intellectual property and taxpayer funds. Now take a deep breath and this time make sure some gets to your brain.

    Telstra have invested somewhere between $10,000,000 and $100,000,000 in some of the worlds best network design & mapping technology and because of this they know about almost every square meter of this country, natural and man made. Would you consider it reasonable to release this information to all comers even before an open and transparent tender process has started? To date there has been no formal tender and as such this is still commercial in confidence, once the tender has been finalised and parties shortlisted all designs should be published for scrutiny. At this stage the government can actually review and chose the best design or even revise the tender if a solution emerges during this process that was not part of the original scope.

    The federal government has not just shortlisted the Opel design but has committed the funds and as such should no longer be subject to claims of intellectual property or competitive threat. The government did only modify the tender but this was after the final decision was made and was designed to benefit the politically motivated winner.

    All submissions made to this closed Opel winning tender should be now be released as information is now partly funded by the public sector, will this happen? No. Why? Because the truth about the most superior submission will be revealed. That is why the federal government is fighting so hard to suppress it.

    Until a tender is released the only way anyone will get the information is to offer to buy it from Telstra, and before you return a sarcastic comment about how much it will cost, this information can make the winning bidder tens of billions of dollars in the coming few years.
  • Telstra

    The Government in its ignorance of the Telecommunications industry and driven by unfettered greed sold off the country's major telecommunications carrier that several of us spent many years building. Further to this, they overlooked Australian talent and expertise and replaced local expertise with American management at exorbitant renumeration, while at the same time, giving Telstra a head start of the twentieth century over new players, i.e., a playing field thatis not level. Where is the margin in this?
  • Telstra

    I agree with some of what you said. However, having worked for both Telstra and Optus, I can tell you that there has been a change in what has been happening. A little while ago, Telstra was closing down and selling off Telephone Exchange buildings whereas nowadays, they are undertaking major refurbishment at the advice of other offshore organisations. The technical steps they are making are justified. However, we had the Australian expertise before the Government invited Americans to come and run it. What people are missing here is the fact that the government's deregulation several years ago with its massive dismantling of many of the workforce of Telecom Australia resulted in the eventual weakening of a major expertise that was owned by the Australian people and sold off due to the greed of the current Australian Government following along the lines of the same principles of disposal of Australian assets that were exposed in the book, "Australia - a Client state which makes riveting reading for anyone who wants to know what happened to our birthright.