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The Forum > Article Comments > Disconnected competition > Comments

Disconnected competition : Comments

By Mark Christensen, published 18/8/2006

No one should be surprised by Telstra's broadband decision.

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I think Telstra is quite right to cancel or delay he network roll out under the current policy.

Delaying the roll out forces their competitors to spend big money by rolling out their own DSLAMS in every exchange, thus limiting their ability to act later on. That is standard competitive behaviour. IINET have already done this and offer the fastest domestic broadband in Australia.

It also forces the government to change the regulations, which just don't make sense at the moment. As Mark points out restructuring and keeping the network under government control is one option. The other is to let the other ISPs roll out their own networks like in the states (though I am not clear on the details).

It is ironic that all Howards chickens are coming home to roost (Telstra, IR, Refugees, housing bubble) just when he controls both houses. There must be a lessen in there somewhere.
Posted by gusi, Saturday, 19 August 2006 2:26:45 AM
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I do believe it was the economists who advocated privatisation in the fist place, I would bet the author was very much in favour of selling of the peoples assets, so there would be no income for public infrastructure as we have now. Now he is advocating spending more money to buy back what his ilk advocated selling.

To say the yank criminals who are now in charge of telstra are doing a good job is total insanity. Telstra is a basket case falling apart, the drive for economic growth has destroyed it as it is with lots of other large businesses who are rationalising to collapse.

I take heart in knowing people in remote areas have a similar level of service.

He certainly doesn't live in the country where it can take weeks to get a technician, constant line failures, virtually no internet, telephone lines that hang on fences in plastic bags for 5 years, higher costs because of distance to ring anyone. Try running a business under these conditions. We only survive because we have satellite internet

The outcome for all the privatised services will have to be taken over by the people, as profit growth organisations always provide less and less services. To maintain their growth in naturally limited markets, they must reach a stage of implosion from lack of serviceable product and staff to service that product. Again future generations will pay dearly for the insanity of deluded economists.
Posted by The alchemist, Saturday, 19 August 2006 5:47:38 AM
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The very proposal that network services could be competitive is finally being revealed for the oxymoronic piece of economic wet-dreaming that it always was.

Public transport, power, water, telecommunications, health - any service that is for the public good cannot be conceived as a viable for-profit concern.

There is nothing wrong with capitalism - provided it is balanced by government and NFP organisations. Balance is everything.

As Alchemist pointed out, Telstra is a basket-case, the best we can do is cut our losses, expel corporate pirates like Sol Trujillo and place the telco back in control of the people for the people.

Otherwise, we will see the escalation of removal of public pay phones (http://www.infarmation.com.au/news/govtindustry/06/08/article12679.asp)
let alone move Australia into the 21st century with state of the art technology.

Market forces don't always work - Australia's telecommunications are being held to ranson by the likes of Trujillo.
Posted by Scout, Saturday, 19 August 2006 12:30:58 PM
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I think that there are three important considerations.

1. Real competition now exists thanks to radio (mobile phone network) and cable (City areas only). The radio networt will be expanded by satellite and possibly by using the terrestrial TV bandwidth.

2. The old twisted pair Tetstra cable is becoming outdated but for as long as the existing cables hold out will offer a low cost alternative as they are already paid for. (ADSL and dial-up).

3. The newest and fastest technology (for the moment) is node to node fibre optic.

The question is how should the fibre optic network be laid out? I think we have a special need for fast long dustance communication because of geography and this should proceed at the fastest pace. Ideological matters of private versus public are of a lower concern.

As an electrical engineer with experience in small and large and international companies and with public corporations and now running my own business I can assure you that particular ideological debate is nonsense.
Posted by logic, Sunday, 20 August 2006 2:38:33 PM
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All of these problems were argued by those truly opposed to the privatisation of Telstra(then Telecom).

I have no problem with Telstra being sold off but only after the Telstra is seperated so that the laying of the infrastructure remains in the hands of the people.

This would make Telstra equal to all other companies in being a provider and nothing else. It also stops them from dominating the market so unfairly.
Posted by Spider, Sunday, 20 August 2006 2:47:01 PM
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IN all this debate about Telstra and its network plans I have
never seen anyone point out that if the directors accepted ACCC's
requirement they could be sued for acting contrary to their belief
that the ACCC proposal was not in the shareholders best interests.

ASIC is quite clear in this and I believe ACCC's proposal is illegal.
It is illegal to incite another person to break the law.

An explanation of ACCC's propsal I read was as if Woolworths built
a new supermarket somewhere ACCC would insist that they set aside
shelf space for Coles at a rate decided by ACCC.

Hmmmm, I wonder if Woolworths' shareholder would sue the directors ?

Anyway Telstra's asset is not in the copper wire in the ground but in the pipes laid under that ground.
This infrastructure is what is valuable.
Telstra shareholders are expected to hand over to other companies an asset they are not willing to pay for at a rate that
the directors think is commercial.
Sometimes people say that the public provided the infrastructure, but
so what, they sold it. Someone else now owns it, namely all those Mums & Dads we hear all about !
Posted by Bazz, Monday, 21 August 2006 11:23:40 AM
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