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Dear carriers: More walking, less talking

Sometimes, a well-placed and well-timed letter can make all the difference. Other times, it can make no difference at all — and even hurt your case. This week's missive by the Competitive Carriers' Coalition, I would suggest, falls into the latter category.
Written by David Braue, Contributor on

Sometimes, a well-placed and well-timed letter can make all the difference. Other times, it can make no difference at all — and even hurt your case. This week's missive by the Competitive Carriers' Coalition (CCC), I would suggest, falls into the latter category.

If you weren't already aware, the CCC is an advocacy body that represents the collective interests of eight carriers other than Telstra. The CCC, according to its website, "advocates pro-competition policy and regulation" and its members include Hutchison Telecoms, Macquarie Telecom, Verizon Business, PowerTel, Primus Telecom, TransACT, iiNet, and Agile Communications, Internode's infrastructure operator.

Reviewing the CCC's historical press release archive leaves no question where its allegiance lie: I haven't seen so many inflammatory words about "dishonesty", "fraudband", "hypocrisy" and "bullying" since reviewing the anti-Labor press release output of previous Communications Minister Helen Coonan.

Now, however, the CCC has reared its head once again, writing to Senator Stephen Conroy about comments made by Telstra chairman Donald McGauchie that its members said, "recently revealed the truth about Telstra's broadband agenda". This agenda, they wrote, includes:

  • the right to a new, unregulated monopoly,
  • that Telstra alone be able to decide whether or not to provide access to this monopoly to any of its competitors,
  • Telstra will choose if Australians have a choice of telecommunications provider,
  • that you reject the clearly necessary structural reforms that you and many others have called for over the past several years, and
  • that the lessons of other countries and other industries be ignored in order to allow Telstra free rein in the Australian communications markets.

The letter goes on to request that the Minister clarify that "the Telstra solution is not acceptable to the Government. That is the line that must be drawn and drawn now by you… The Government must stand up to Telstra and refuse to accept a bid that is against the needs of the Australian community and is counter to your own past direction to all other potential bidders."

Is this really the right way to go about things? After all, the industry is well and truly stuck in a tendering process for an absolutely mammoth infrastructure project. Telstra certainly knows this, and I assume this is why we have had less rhetoric from them recently (putting aside recent threats by Senator Kate Lundy to sue Telstra for personal smears).

Telstra engineers, everyone, are locked in their caves, laying down precise details of the company's plans for world domination. Senator Conroy has previously, and correctly, declined to offer more information about the tender on the basis that "certain companies involved in this process could be adversely affected by any comments I make".

Pushing Conroy to make a statement about "the Telstra solution", when Telstra has not even submitted its solution, shows more about the eagerness of Telstra's competitors to short-circuit the tender process than it does reveal new information about Telstra's plans. After all, we already know Telstra's position on the NBN: it wants the contract so badly that it even reversed its ridiculous and commercially questionable plans to not offer wholesale ADSL2+ services. Terria wasted no time in releasing its own response to McGauchie's comments: "Mr McGauchie's presentation on Monday was neither rational nor factual," Terria chairman Michael Egan wrote. "No one is calling for the dismemberment of Telstra as Mr McGauchie hysterically asserts. This is not a debate about the structural separation of Telstra's existing business and network structure."

Here's the really curious thing: six of the CCC's eight members are also participants in Terria, the coalition of carriers who have emerged as the most vocal, and presumably the leading, competitors to Telstra for the bid (the sixth, if you're checking, is Internode affiliate Agile Communications).

Amazingly, one of these is Macquarie Telecom, which this week retracted its own NBN bid to instead take on an advisory role with Telstra in a money grab that is also a concession to the fact that it was a long shot from the beginning.

Call me a sceptic, but isn't it a blatant conflict of interest for not one but two consortia in which Macquarie participates, to come out with a statement questioning the commercial motives of one of its clients? That's what analysts are for: Citibank, for one, has suggested that Telstra's expectations of 18 per cent annual return would lose it the NBN contract. Economic consultancy the Centre for International Economics reached a similar conclusion earlier this month in a study that forecast a broadband price rise if Telstra wins the NBN contract. The only problem with this study? It was, apparently, funded by the CCC.

No matter how correct and accurate these studies are, they suggest that Telstra's NBN competitors are using a façade of independence to run a smear campaign against their biggest rival — on two fronts — in a tender process that needs to be managed with the highest level of probity.

At least, that's what Telstra will argue in its appeal should it lose the NBN. So why would the heavily overlapping membership of the CCC and Terria continue giving it ammunition to support such a claim — especially when six of its members are currently participating in a formal government tender which clearly states they are not to discuss the tender with anybody.

We all know what would be the best outcome from the NBN, and the goal of operational separation is well enshrined in the NBN tender — which, love it or hate it, is the tender that has been issued. I'm sure Senator Conroy knows all too well that he cannot afford to compromise the objectives set forth in that document, and he will be evaluating tenders against those criteria with an eye to making sure his final decision can withstand the glare of intense scrutiny.

Even Telstra, despite its sabre-rattling, knows all too well that it will have to compromise to get the outcome it wants. In the meantime, perhaps the other bidders could just tone down their rhetoric and stop lobbying the Minister for declarations that he shouldn't and will not make. That way, they can just get on with lodging a comprehensive, effective NBN bid that will finally deliver the competitive, pro-consumer Australian telecommunications market it should have had a decade ago.

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