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The Forum > Article Comments > Competition policy dilemmas: time for a new direction > Comments

Competition policy dilemmas: time for a new direction : Comments

By Mark Christensen, published 28/9/2006

How can competition policy be adapted to cope with network businesses?

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Telstra represents an impossible situation for government. The Federal Government is instructing it to do four key things:

1. Maintain unprofitable services to regional or remote areas.
2. Build and maintain a national telecommunications network encompassing high speed broadband (recently jettisoned immediate FttN plans, but still a long term agenda)
3. Allow other operators (i.e. optus) to use this network, and not pay excessive charges for use
4. Be a profitable private entity, with solid dividends for shareholders.

The problem is, number four is incompatible with numbers 1, 2 and 3. Were Telstra to be allowed to charge what it wishes for other operators to get in on the action, it would solve much of this dilemma, but the problem here is how do you have proper competition when some providers are reliant upon the systems of a competitor?

Similarly, how can Telstra remain a competitive business if it is forced to service remote areas, when the cost far outweighs the returns?

The process of complete privatisation has begun, and while I believe Telstra should never been privatised, this in-between phase can't work.
Put simply, the Federal Government needs to crap or get off the pot. Buy it back or sell it off and pump money into telecommunications in regional areas on a permanent basis.
In the long term, those are the only options.
Posted by TurnRightThenLeft, Thursday, 28 September 2006 11:33:14 AM
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