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The Forum > Article Comments > Tall tales from Telstra > Comments

Tall tales from Telstra : Comments

By Betsy Fysh, published 12/10/2006

Will a privatised corporation (Telstra) be willing, or able, to deliver equitable access to communication technology across Australia?

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Clearly Betsy Fysh should be referring her complaint to the Telecommunications Ombudsman rather than On Line Opinion. The complaint should link the subsidised satellite and ADSL issues so that it's clear that the expectation is that Telstra either provide one or the other.

On the wider issue, I've never been clear why people living out in the bush (which to a greater or lesser extent here means outside the major urban areas), should expect to receive all the communication services at the same level of performance and cost as those in urban areas. It costs more to provide those services in the bush.

I have not noticed bush dwellers banging on my door demanding to be allowed to pay as much as I do for accomodation, tolerate the congested roads that I do, or suffer the constant noise that a crowded community invevitably creates.

There are all sorts of trade offs involved in choosing where to live. There is no good reason to identity one particular kind of technology, and consider that equity requires that access to that technology be equalised across Australia.

If bush dwellers envy the lives of urban residents so much, then they can come and join us.

Sylvia Else.
Posted by Sylvia Else, Thursday, 12 October 2006 10:28:50 AM
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Well said, Sylvia. We have freedom of movement in Australia, and freedom of choice as to where to live. Nowhere is perfect, all have pros and cons, no one who chooses to live in an area where access to goods and services is limited for geographical reasons should expect to be supported as of right by either government or commercial suppliers.
Posted by Faustino, Thursday, 12 October 2006 10:35:29 AM
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An interesting article Betty but sadly typical.

Originally part of the PMG Department, Telstra was then a purely Commonwealth Public Service organisation.
Whitlam then split it into three commissions – OTC, Australia Post and Telecom. Although it was still then a Public Service operation it’s “commission” was to provide a basic telephone service to about 98% of the population at equitable cost. That meant that almost everybody had the right to access and the cost of provision was nationally cross-subsidised.
It was later corporatised into Telstra and, no longer part of the Public Service, it became self-funding and paid dividends to the treasury.

The (so-called) competitive environment that came later, plus partial privatisation meant that the company has to run as a hard-nosed business.

Back in the PMG/Telecom era you were called a “subscriber” and second only to the Minister for Communications in importance.
Now as a “customer”, the shareholder is far more important than you and unless you generate a significant amount of revenue for the company you won’t even rate.

If it costs Telstra $1,000,000 to provide you with a service they need to get $1,000,001 back, otherwise they simply won’t do it.
Expecting a private company to provide equitable service at any cost is like telling McDonalds that they must have a store in every town.

Eventually Telstra may need to shed all non-profit rural customers and you will be supported by subsidies from the taxpayer.

As a citizen and taxpayer I strongly feel that the core network asset should have stayed in public hands but as a shareholder I don’t want to keep wasting (my) money on unprofitable areas.

We now have a situation where the communications in Parliament House is owned and run by the Singapore Government. Eventually Telstra will also get its orders from an overseas Head Office and what we have taken for granted for so long will be gone forever.

Enjoy it while you can because in the bush, it may be as good as its ever going to get.
Posted by wobbles, Thursday, 12 October 2006 10:43:11 AM
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I sympathize with you Betsy; poor internet access can be very frustrating. I would hate to swap my cable modem for dial-up on a noisy line and I agree that better access should be a priority but is Telstra the real culprit.

I would assign my primary blame to government regulation and the ACCC. Telstra is required to sell services in the bush for the same price as in the city. If Telstra had a complete monopoly this would be no problem but resellers and wholesale caps in the city keeps the margins low and the bush is simply not profitable.

Remove the regulation and the ACCC and people in the bush will be able to have whatever service they are willing to pay for. A similar argument applies for the city; Telstra cancelled its fibre roll-out when the government decided that it would have to provide subsidized access to its competitors.

Telstra certainly has its faults but it has demonstrated repeatedly that it is willing to invest in infrastructure only to become stymied by government regulation.
Posted by Rob88, Thursday, 12 October 2006 2:35:17 PM
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Not much sympathy for the bush here. Probably because there are a large number of regional citizens who are unable to access this site at a reasonable speed to put forth their side of the argument...

Plenty of Australians don't have the option of just upping and moving to the cities.

I'm not advocating communism, but there was a day when we weren't communists, yet we still expected our government to provide core services - schools, hospitals, police, roads - and telephone access - to all of Australia's citizens.
If the argument is that the role of the state is to look after the majority, then fine. Let's start categorizing.

The majority of Australians travel by car. Instead of having public transport, let's offer subsidies to buy cars, and we can slowly phase those out too.
Granted, it will inconvenience many, but hey, it'll save tax dollars that we can use as subsidies to wean people off other services.

Let's start by weaning people off the public health system. Let's face it, it's inefficient, it doesn't work like the private health system. We can use the transport money to introduce more people to private health insurance, and gradually phase that out. It's not hard - just look how we'll we've managed to cripple medicare.

Let's continue by selling off more assets - their role is clearly to make a profit, not service unprofitable elements of the community. This is Australia! everything must be profitable! The taxpayers may own these assets through the government, but if we sell it to them we can get a cash injection and boost our economic credentials.

Ug. Okay, I'm probably going a little over the top here. But it kind of irritates me when city dwellers who are used to broadband and rarely step foot into real regional Australia like to pretend that everybody should just move to the cities at the drop of a hat... of course, the same people rail against congestion and the dire issues associated with supply and infrastructure in the cities which is caused by unrestrained growth, but hey.
Posted by TurnRightThenLeft, Thursday, 12 October 2006 4:52:45 PM
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TurnRightThenLeft

You're misrepresenting the "city dweller" position. The position is not that the people in the bush should move to the cities. The position is merely a recogniition that certain things, such as communications technology, cost more to provide in the bush, and bush dwellers should not expect to get a subsidy for them, any more that city dwellers get a subsidy for accomodation.

People always want to have their cake and eat it, but life doesn't work like that.

Sylvia.
Posted by Sylvia Else, Thursday, 12 October 2006 5:05:51 PM
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Under the digital data service obligation you should be able to get ADSL unless "line conditioning or pair gain" is on your PSTN line. (Given you live within the distance limits of ADSL)

This applies even if you live next door to a telephone exchange.

Line conditioning is another way of saying insufficient infrastructure. Instead of installing more phone lines Telstra has been "fiddling" with the lines. This lack of infrastructure has been happening for years, ever since Howard decided to try and sell it.

If you cannot get a "broadband" (Most Australians really do not know what it means) connection it works against de-centralisation. Many internet based businesses could be run from "the bush" if only the infrastructure was there.

Maybe you should move to Christmas Island they have great digital telecommunications I wonder why?
Posted by Steve Madden, Thursday, 12 October 2006 5:07:06 PM
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I agree strongly with wobbles...the core network asset should have stayed in public hands. The Howard administration is selling the telecommunications infrastructure to instituional investors for a song.

As Sol has pointed out the infrastructure has been "runned down" under Ziggy, which allowed for those very generous dividends to flow on to the major shareholder.

Considering the amount of funds that have gone into the telco, we all should have fibre to the door by now... and rather than just talking about "broadband;" we should all be talking about "ultraband".. a throughput whereby you can stream HD TV if you chose....

Another issue.. is the Foxtel equation, and how the telco wants to protect its investment in that venture.

I disagree with Sylvia, in that, in this day and age, telecommunications infrastructure is just as important, if not, more so than, road transport infrastructure.

The sell - off is the equivalent to selling off the pacific highway.

Unfortunately, we will all be paying "top doillar" for an antiquated system.

I live less than 20 Kms from Newcastle CBD, and ADSL access only became available about 6 months ago.

Telstra has been promoting ADSL since 1996. . .heaven knows when regional areas will have access to ADSL2+
Posted by avior, Thursday, 12 October 2006 5:21:30 PM
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On a personal note, before the line was upgraded for ADSL, I went the 1xRTT/ 1x EVDO high speed mobile wireless CDMA route because the dial up kept dropping out when I was sending large files.
I found this service to be extremely expensive, and I would not recommend it to anyone. Unlike cable/landline connections, atmospheric conditions had a big part to play if I was online or not.
Telstra is now in the process of deploying its "Next G" wireless mobile broadband. Hopefully, when this system is rolled out to your neck of the woods, the service will not be affected by atmospheric condition to the same degree, and the plans and pricing are reasonable.

AFR reported on 5/10/06:

"The refusal to proceed with even a more modest version of an upgraded fixed network will mean broadband speeds on fixed lines for most Australian homes will remain at levels now considered unacceptable in most other developed countries.

Telstra is instead promising that it will deliver much faster wireless broadband speeds to 98 per cent of the country on its so-called Next G Network, a $1.1 billion third-generation mobile phone network on the 850 MHz band that is central to Mr Trujillo's turnaround strategy.

It says this will deliver speeds of up to 3.6 megabits per second on this service this year and up to 14.4 megabits per second by the first quarter of next year. The Telstra CEO is expected to argue that congestion will not be an issue most of the time for most users."
Posted by avior, Thursday, 12 October 2006 5:42:22 PM
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This subject has descended into a "them and us" attitude between regional and city folk, a tired argument about everything you can name, as old as civilization! Let's have some lateral thinking, i.e., (1) allocation of spectrum from the Federal Government for wireless broadband; including kilowatt power upgrade of existing towers Australia wide; piggy backing of services on existing spectrum towers with appropriate security for OTC and Defence traffic; (2) a committment to broadband services via power supply companies; Ergon and the like. It can be done technically, even though probably more expensive; but if power companies were subsidised, by the taxpayer, I'm sure they would be interested as a commercial additional enterprise.
Posted by boofhead, Thursday, 12 October 2006 6:30:26 PM
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Poor communications and lack of services are reasons why people have drifted from country to town. However the federal government has a policy of encouraging people to move in the reverse direction.

It is reprehensible that Howard's government, driven by ideology, sold a government agency that was delivering services to the country and remote areas and making a healthy profit for the taxpayer as well.

In the future the taxpayer will be subsidising the country services or they will not be provided.

The corporatisation and eventual sale of Telstra has not helped me and I now pay much more per annum for phone services that I ever did before. Some of this is because of the mobile phone rip-off.
Posted by Cornflower, Friday, 13 October 2006 8:35:01 AM
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Cornflower put it pretty nicely.

And fair enough, you can argue that perhaps country people should pay more - but the thing is, it's still an issue of what we consider to be government services. What exactly is the role of our government?

I for one, consider the foremost role to be the provision of services. Under the logic that the country people should pay more, then we also should be introducing increased taxes for regional citizens for road maintenance.

Sparsely populated areas cost more to maintain. So do telecommunications services.

By the same brush, we should be charging regional people more for access to water, (increased requirements for pipeline infrastructure) more for power (more powerlines and grids) and more for pretty much all government services really. Anything centralised is easier to maintain.

This of course, would cause a massive exodus from regional areas - struggling infrastructure in cities would collapse, and road congestion would spiral. This is happening already.
Australia's agriculture industry, (and we're among the top three nations for wheat exports) would effectively perish if taxes were to increase on top of subsidisaton practices overseas.

I won't go too much further into that, as it's stretching relevance as is, but suffice to say I simply think the foremost role of our government should be providing some services to all citizens. Apparently that changed somewhere along the way, and I don't think the majority of Australians are happy about it either.
Posted by TurnRightThenLeft, Friday, 13 October 2006 1:30:52 PM
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I think the issue with the provision of equitable country services is that, perhaps they SHOULD expect to pay more, but what will invariably happen is they they will end up being subsidised by the taxpayer.

Thus we will go from a self-funded public system to a private quasi-monopoly that will be underwritten by the taxpayer forever, long after the T1,T2 and T3 dollars are spent.
To make it worse, we already have over 4% of GDP leaving the country as dividends to overseas owners so there will be even less money around to play with.

It's no use looking overseas for a solution to this because despite the Governments initial arguments about Australia having one of the few Telco's in 100% government hands, what they neglected to say was that all but a few are still part-owned by their governments.
Posted by wobbles, Friday, 13 October 2006 3:04:44 PM
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I have recently put my future for ADSL into Telstra's new 3G network.
I am yet to have the device delivered. I am at the moment connected thru ISDN which recently is disconecting every minute, they're working on it.
I was told by the tele marketing man that I could receive comfortably in the geography where I live, CDMA is hardly available. I was also told that I could look forward to using it as a desktop modem only available at the moment to laptops.
If it all works it will be a wonder, of course I can expect cost to soar, but the promotion gives me a new handset and a fair deal on 20cent calls.
The promo does't say the present cost will remain, and I expect to oneday pay a lot more for the service, meantime we hope.
fluff
Posted by fluff4, Tuesday, 17 October 2006 12:01:40 PM
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City people are quite strange, especially when they blabber on about how country people shouldn't expect the same level of services as city people and make it out (without explicity saying) that the country people are leeching off the city.

It's the other way around. 2/3 of our country's wealth that is created still comes from agriculture and mining... from country areas. The cities simply re-cycle this wealth (for the most part)through our services industries. If anything the city people are mooching off the country.

Privatization of our telecommunications monopoly in country as sparsely populated and as large as our was always an economists wet-dream.

People seem to think that if services dissapear from the bush (which it will), this is some sort of maret failure. It isn't. Providing services in such areas is not profitable, so services will not be provided there, thats the market working fine. It is however a moral failure.

We have seen this time and time again in other countries with such tales as the disasterous water privatizations (Bolivia,Argentina,South Africa etc). People who couldn't afford water had to drink contaminated water from other sources (poluted rivers etc.) and got sick and died. People who could, bought clean water and lived. Private water companies made a profit. The "Free Market" showed that private water comapanies were more "efficient" because they made profits. Moral failure.

We should move away from the cult of the free market. The free market is great, but isn't the solution to every problem.
Posted by Bobalot, Monday, 23 October 2006 11:43:51 AM
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