2007: How was it for Telstra?

Was 2007 a good year for Telstra? Possibly. Was it a good year for Telstra's lawyers? Definitely.

Telstra brought in the year in pretty much the same way it sees it out: spanking hefty amounts on legal fees, slamming the government's communications policy and bemoaning the state of the regulator.

January saw Australia's biggest telco gearing up to wage legal war on consumer watchdog the ACCC after it claimed the regulator had set wholesale broadband pricing at levels lower than the actual cost to the company of supplying the infrastructure.

In April, Telstra's lawyers were earning their fees with a victory against the ACCC. The Federal Court ruled that a competition notice served on Telstra in 2006 -- which claimed a price increase made in March of that year meant the wholesale price of line rental rose above that of its retail price -- was invalid.

A victory, cried Telstra. A disappointment, cried the ACCC, which had already lifted the notice two month previously anyway. A shame, cried the other telcos, who had been gearing up to sue Telstra over the alleged competition breach or at least encouraging the ACCC to do so in their stead.

A second legal battle between the pair emerged late in the year, when a case brought by the ACCC saw the Federal Court rule in its favour that Telstra had misled consumers over the extent of the telco's 3G coverage.

But it's not all been about lawsuits for Sol and friends. 2007 also saw Telstra launch Next IP -- the company's $1.5 billion IP core -- aimed at enabling more converged services for customers.

The telco also took the wraps off the first stage of its IT overhaul, known as release one, which went live at the tail end of the year. Release one will save the company $100 million annually, and see the telco move towards greater purchasing of out-of-the-box systems.

In June, Telstra lost out in its bid to build the nation's WiMax network -- and around $1 billion in funding -- when the government handed the contract over to OPEL, a joint venture between Optus and Elders.

At that point, Telstra did what it does best -- or at least most often -- and fetched the lawyers, suing Communications Minister Helen Coonan and alleging the full amount of the available funding was only revealed to the winning bidder, OPEL, and not itself -- a case that it lost in November.

Perhaps grown weary of the hate-hate relationship between herself and Telstra, then Communications Minister Helen Coonan handed over one notable decision affecting the telco to a third party.

In September, Coonan passed the baton on allowing -- or otherwise -- Telstra's planned switch off of its CDMA network to Attorney-General Philip Ruddock.

Throughout the year, Coonan has remained sceptical over how well the CDMA replacement, Next G, has been performing, and told ZDNet Australia in November that the network had "enormous problems".

The handover followed her decision to pass a draft guideline forbidding Telstra from closing the CDMA network until the Attorney General dubs Next G equal or better in coverage and performance to CDMA. Pretty much what Telstra says it does already, but independent auditors are currently testing the strength of those claims.

Meanwhile, Telstra was encouraging users to change to Next G ahead of the CDMA closure, offering a $100 credit against switchers' bills, among other incentives and launching new phones designed to appeal to bush users.

Next G received much TLC from Telstra throughout the year. Aside from an increased range of 3G devices, both phones and laptop data cards, Telstra upped the speeds of Next G compatible hardware to a theoretical maximum download speed of 7.2Mbps.

Earlier improvements included an extension of Next G's range and, with the year drawing to a close, the telco reported over two million users on its 3G networks.

And it wasn't just 3G getting polished up: Telstra's cable network got a speed boost in 2007, reaching up to 30Mbps download in Sydney and Melbourne. The telco even went so far as to hint if it lost out in any future government fibre plan, it would lavish its loving on cable instead.

The Howard government's plan to take a "high speed broadband network" -- read fibre-to-the-node -- to Australia's metropolitan areas brought out the finest level of mudslinging between Telstra; its main rival, the Optus-led G9 consortium; and the ACCC in the middle of the year.

Telstra's CEO said the company wouldn't get involved with the fibre plan. Its chairman said it would. Telstra said G9's proposal would mean higher prices and lower speeds. G9 members said Telstra's proposal would end competition and promote a monopoly. Discussions between the government and the telcos reached an impasse -- then passed it.

However, with the election looming, by November, the Coalition was not alone in wanting to get tough on Telstra. Labor showed its muscles and hinted at a tougher stance on the operational separation of Telstra, while the Coalition's Coonan even went so far as to suggest structural separation could be on the cards.

Post-election, Coonan was no longer Communications Minister, replaced by Labor Senator Stephen Conroy, who became Broadband Minister. And as he took on Coonan's mantle, he looks set to take over her fractious relationship with the incumbent.

After Conroy took up the position, he spruiked the party's AU$4.7 billion commitment to fibre. Telstra was quick to threaten to take its ball and go home, saying it would only get involved in a fibre network on its own terms. Needless to say, terms that would remove any open access provision and see Telstra giving a two fingered salute to its rival telcos.

Conroy dismissed the comments by Telstra CEO Sol Trujillo as "jockeying". Whether he will remain so sanguine in 2008 remains to be seen.