The Federal Government is extremely likely to be forced into a legal battle with Telstra after kicking the telco out of the National Broadband Network bidding process, according to numerous industry onlookers.
the reaction The Federal Government is extremely likely to be forced into a legal battle with Telstra after kicking the telco out of the National Broadband Network bidding process, according to numerous industry onlookers.
When Robin Simpson, research director of analyst firm Gartner, was asked what he
thought the odds were of Telstra challenging its exit from the
NBN bidding process, he said "100 per cent",
pointing out that the telco had not been frightened to use its
legal clout in the past.
He was backed by Stephen Collins, web strategist and founder of the acidlabs consultancy, who reacted to the decision today on his blog.
"The senior management continues to believe that
being, to quote a trading phrase, 'big swinging dicks', is going
to get them what they want," he wrote.
Stephen Collins (Credit: acidlabs)
"I hope that the Federal Court tells
Telstra to pull their heads in when the inevitable case comes
before the full bench," he said. Shadow Communications Minister Nick Minchin also considered action
possible saying he was sure Telstra was keeping its legal options open.
Legal action from the incumbent telco would not be necessary if Telstra chief executive Sol Trujillo's comment in a briefing this morning that the government might bring Telstra back into the process
after receiving the recommendations of the expert panel came to fruition, but
Gartner's Simpson thought that was unlikely.
"That's really clutching at
straws," he said. "I said [its strategy] was risky and a little
bit crazy... The trouble with brinkmanship is one side
loses."
Minchin didn't rule an about turn, saying no one could fathom what the
government's motives and hidden agenda were, and as he claimed the process
had already been poorly run, he wouldn't be overly surprised if
Telstra bypassed the other bidders at the end of the process to
negotiate with the government.
Supplying information in 'early December' means your submission was missing key elements. Morons.
Stilgherrian
ABN AMRO telecommunications analyst Ian Martin also said that it was possible the
government could be considering such a strategy to improve its
bargaining position with the big telco, but added that no one would
know until February. Despite this concession, he believed Telstra's
and the government's positions on delivery of network
information and equity involvement were incompatible.
Telstra's main union, the Communications, Electrical and
Plumbing Union (CEPU), which has been leading a strike at the telco since Saturday,
was very concerned about the turn of events. "Our members in
Telstra are keen to use their valuable skills in the development of
such a critical piece of national infrastructure. They won't have
that chance now," the union said in a statement.
CEPU National president Ed Husic was unable to say whether
Telstra's ejection from the NBN would mean layoffs, since the
company had failed to tell the unions whether it would use internal
or contracted workers to build the NBN.
Husic believed there were many parallels with the way the union
had handled its employees and the way it had handled its pitch for
the broadband network.
Stilgherrian (Credit: Stilgherrian.com)
Technology and media consultant Stilgherrian, writing on his blog, believed the telco should
have remembered what it learned at school about handing in things
on time. "The closing date was 26 November. Supplying information
in 'early December' means your submission was missing key
elements. Morons," he said.
"Did you ask the teacher for an extension? Did you have a note
from your mother? ... If you can't even provide your goddamn
submission on time, why the hell would we be stupid enough to give
you $4.7bn of our money?"
