Labor needs iron hand to collar Telstra on broadband

Incoming Prime Minister Kevin Rudd and his likely Minister for Communications Stephen Conroy will need more than a firm handshake if they are to avoid a battle with Telstra that could derail their plans for a national broadband network, according to one industry expert.

"Only very early and strong intervention on the part of the new government can prevent a war with Telstra -- which started with the last administration," said Paul Budde, managing director of telecommunications consultancy Buddecomm.

"There needs to be very decisive action otherwise we'll still be talking about this at the next election," he said.

Budde said that for Rudd's plans to work effectively and on schedule it would require a "massive turnaround" on Telstra's behalf, which he believes will not come willingly.

He suggested that the new government arm regulatory bodies with more powers to make the national operator "fall into line" if necessary.

"There's no way around the fact that Telstra has to be involved, it's a national network and it has to be made available for these plans to work, but not under Telstra's conditions," said Budde.

He believes that Telstra will have to undergo some degree of structural separation in order to get any national broadband infrastructure off the ground, voluntary or otherwise.

The new government has to engage with industry, which is what the previous one failed to do.

Paul Budde, Buddecomm

"Nothing less than very, very tough structural separation legislation will ensure Labor's capacity to execute its plans under such a scenario, but even this could take at least a year, which would again undermine Labor's promise to start rolling out in 2008," he said.

Budde said that Rudd's government must not only play a strong hand in dealing with Telstra, but step on the front foot with the ICT industry as a whole if it intends to fully realise its plans.

"The new government has to engage with industry, which is what the previous one failed to do; all the research is done, it's now a matter of achieving a consensus between the industry and government on how we're going to make this work," he said.

He told ZDNet Australia that the ICT industry is on the verge of presenting an "industry vision" to Senator Conroy, the man most likely to take over Helen Coonan's role as Minister for Communications.

According to Budde, around a hundred companies have been working on the proposal for a month. Describing it as the industry's "national blueprint", it is rumoured to include ideas for an infrastructure that supports e-health applications, smart-grid energy saving equipment and tele-education.

"This infrastructure can do far more than just provide faster Internet access," he said, going on to point out that far from being a stand-alone initiative, the Rudd government will need the network to implement a number of its other policies effectively, such as its proposed 'digital revolution' in education.

Despite being buoyant about the network's potential development, Budde is skeptical about Labor's timeframe for its completion, and believes there is very little possibility that the government will begin its network rollout by 2008.

"I'd be optimistic to be talking about a delay of three years, whichever way you look at it there's no quick fix, the government have to initiate significant structural changes with Telstra and reach a level of consensus with industry first," he said.