Sunday, 16 September 2012

NBN: Policies - What you do trumps what you say

Mr Turnbull in his recent Response to the NBN Chairman, made some statements about Coalition Policy that I believe are flatly contradicted by the facts.

The Policies and actions of past Coalition Governments have been apparently without vision and supported long-term violently anti-competitive behaviour by Telstra.

The coup de grĂ¢ce was the final sale of Telstra, netting another $15.5B, but without forcing structural separation of the wholesale and retail arms.

This created a technical monopoly in the provision of retail services based on the Telstra wholesale copper network and an effective monopoly controlling national fixed-line networks, by being able to prevent viable new entrants, as they did with the Optus HFC Cable-TV network.

The privatised Telstra appears to me to have been the largest Private Sector monopoly ever created in Australia. This was a very considered and deliberate act by the Coalition. I find it incredible that they were unaware of both the market power the new entity had and the aggression and truculence with which it would unhesitatingly wield it.

I find these comments by Mr Turnbull particularly disingenuous, even misleading:
We support all Australians having access to very fast broadband, but would prefer it be delivered by the private sector in a competitive environment as far as practicable, instead of by a government owned monopoly provider.
The parts I find misleading:

  • "support all Australians having access to very fast broadband"
    • No you don't. If you did, the 2005 Telstra FTTN would've been finished 3 years ago.
  • "private sector in a competitive environment"
    • You've actively supported highly anti-competitive private sector  behaviour in Telecomms.
  • "a government owned monopoly provider"
    • whilst you created the largest Private Sector Monopoly in Australia.

Whilst Mr Turnbull can dimiss the non-action of the Coalition Government over Telstra predatory anti-competitive behaviour in the 1995-1997 HFC rollout as "far, far away, long, long ago", he cannot dismiss their failure to direct Telstra to proceed with its 2006 ADSL2 FTTN plans, and to open that network for resale, exactly as the ACCC had ordered them to do with ADSL1.

The evidence I see, makes me conclude that the Coalition:

  • may not support Government monopolies, but is whole-heartedly behind Private Sector monopolies, as demonstrated by their creation of Australia's largest after the "T3" sale. 
  • supports violently anti-competitive behaviour, especially in Telecommunications, as "Free Market". The abandoning in 2006 of Telstra's ADSL2 FTTN was publicly endorsed by the Minister whilst disagreeing with the ACCC.

These actions by the Coalition need to be contrasted with the reforms introduced by the ALP under Paul Keating. It is clear from the actions by Rudd/Conroy and Gillard/Conroy on Telstra, that the ALP would've only completed a full sale of Telstra after separating the retail and wholesale arms:
... implement far-reaching economic reforms, including the progressive deregulation of the financial sector, the float of the Australian dollar, extensive tax reform and the dismantling of many protectionist barriers. These reforms assisted the expansion of the Australian economy. He was responsible for deregulating the airline and telecommunications industries and for establishing a national framework for power.

... As Prime Minister [1991-1996] he continued his progressive reform program which included the establishment of a National Training Authority, a national superannuation scheme to redress low national savings and labour market and training reforms which addressed Australia's long-term unemployment problems.
The Hawke/Keating governments created the reforms that the Howard Government had the advantage of, which is part of the natural course of the Political Game.

But in what appears to be a stunning lack of foresight or vision and incredible policy position of fostering violently anti-competitive behaviour, they allowed the full sale of Telstra without removing its monopoly powers by not separating the wholesale and retail arms.

What does the Coalition support? I inclined to believe their actions, not their words.

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