"But Telstra involved over a million mums and dads investors, ... who rather then splurge it all at the pokies, had actually saved a few shillings."

Well, that doesn't change the concept of caveat emptor either, does it? Why not put it in the bank and earn a term deposit instead. It's much safer. The shareholders were obviously attracted by the prospect of a high return.

"But these people would feel badly burned, for if they can't trust their Govt, who can they trust?"

You're playing THAT card after consistently saying that the Government is hopeless??

"Once again, if the Govt changed the rules and took away the house they had sold you, what would your reaction be?"

That's rather emotive. Taking away one's house is a lot different to taking away one's investment. Although I admit I wouldn't like it if I was led to believe something was going to happen when it didn't. Not that that stops it happening all the time.

When a Government wants to make progress on an issue and is faced with a brick wall, what else can it do? If it does nothing, the country stalls and the power imbalance between capitalists and the rest of society widens. If it fails it will get walked all over. To win it has to do some things it would rather not - the blackmail as you call it is in proportion to the general apathy in the community. Is blackmail good? No. Does it have bad side-effects? Yes. Does it have good effects as well? Yes. Are there going to be a new set of winners and losers? Yes. Is it a vexed problem whichever way you come at it? Yes. Would it be any different if you were driving the process in Government, Yabs? No. Anyone else got some workable ideas how to fix the problem in the current paradigm without causing others? I seriously doubt it. Are there any other volunteers to fix the problem? Nope - I didn't think so. That's the reality. As you've said to me, "Get used to it".

RobP, what's this doctrine of caveat emptor that you have raised to some sort of pre-eminence in contract? Have you got any idea how much the original idea has been changed, and/or abandoned, by the courts.

Banks used to be able to enforce their documents, even though people who signed them didn't fully understand what they were signing. Caveat emptor? Nope. As some of the banks are about to rediscover with the Storm debacle, they have a duty of care and they're not allowed to rely on their "unconscionable conduct".

Same thing but in different ways applies in consumer law. Sell someone some goods that aren't "fit for the purpose" and you'll have to accept their return, or pay damages. Caveat emptor? No way.

In this case you have the vendor deliberately changing the rules on the purchaser to damage their investment because now it suits them. To me, that is unconscionable.

When I see so little opposition to it, because it seems to suit the majority, I realise how functionally dishonest Australian society has become.

But is it really a crime that only disadvantages a small segment of the community - the 5% of us who own shares in Telstra? No. Investors watch this sort of behaviour and they call it sovereign risk and demand a premium for their investments because of it. Australia is a huge debtor nation, and the last thing that the government should be doing is putting up the cost of borrowing for all of us, but that is exactly what they are doing in this instance.

It's the sort of behaviour that you would expect in kleptocracies like Russia, or Zimbabwe, but not in the land of the fair go.

Yabby said;
In real terms, communications costs have
dropped dramatically over the last 10 years or so, since Telstra
was sold.
unquote

The reason for the fall was only in part caused by the sale of Telstra.
The big factor was the change in technology.
I remember one exchange that I visited where the building had
previously been three floors of equipment.
It now had two empty floors and one corner of the third floor was
occupied by the replacement exchange.
The equipment is now much more reliable and needs almost no maintenance.
Many microwave links have been replaced with fibre optic cable.

That is what has changed the costs.

It might be that Telstra knows how much it will cost the govt to build the everywhere NBN.
It may be that $40B is way under what it will cost if Telstra is not involved.
It could get to the point where the cost will escalate to
such an extent that it will be politically nonviable to fund it.

To get fibre, while not using Telstra's fibre, to every town in
Australia will be very expensive.

That is other edge of the Minister's sword that he is wielding.

Telstra may decide to go their own way and wait for it
to drop into their lap.

However I think that because of the spectrum needs that they will
split the company, get the spectrum and then sit on their hands.

*Why not put it in the bank and earn a term deposit instead. It's much safer*

Come on Rob, you are a grown man. You know perfectly well that
between inflation and taxation not allowing for inflation, bank
deposits go backwards in real terms.

* Taking away one's house is a lot different to taking away one's investment*

Not so, your house is an investment. Plenty of grey nomads saved
their pennies to buy Telstra shares, the divies being their income
in retirement to buy food etc. This is a bunch of hard working
oldies, who did the right thing all their life, now you think its
fine that the Govt screws them.

*If it does nothing, the country stalls and the power imbalance between capitalists and the rest of society widens*

Come on Rob, those Grey Nomads are not evil capitalists. Simply
everyday people who worked hard and saved to provide for their
own retirement.

The Govt has lots of options. If they are so convinced of the NBN,
then why should they fear competition from Telstra?

Otherwise the Govt is free to return the money it took from
the public, when Telstra was flogged off. The Govt could offer
Telstra a reasonable deal, something which it has never done.
The Govt could renegotiate a deal with the new CEO.

Frankly, most of the so called competition is hardly competition,
prepared to invest in infrastructure. More like some dill hiring
Indian call centres to drive people nuts with yet more calls to
flog em a phone, all on the back of Telstra.

As Graham points out, this is third world stuff, expected in
maybe Venezuela and other banana republics, certainly not in
a first world economy.

In terms of political credibility, it makes Australia look very
stupid indeed and when we go borrowing even more money cap in hand
overseas, they will take note.

Yabby,
"owners can instruct the management". When was the last time that shareholders made business decisions in a private company? All they seem to vote on is Board remuneration matters.

The arrangement we have with supermarkets is more like a cartel than free and open competition and petrol prices seem to rise and fall in unison with barely any significant difference between them.

As somebody who has been employed in the telecommunication network construction and design areas for the last 36 years, I can say that Bazz is spot on when he says that the driving force behind privatisation and cost has been technology. Privatisation was inconceivable while technological costs were high and the "tyranny of distance" was another limiting factor. A crossbar trunk exchange used to take up an area of about a third of a football field and was limited to a maximum of 4000 lines in and 4000 lines out. Now an IP softswitch is about as big as a couple of refrigerators and has vastly more capacity and enough bandwidth to switch video calls. Telstra has a couple of thousand exchanges but Optus only needs a couple in each capital city and most so-called competitors are only resellers of the same network. During the Telecom era, most subscribers were cross-subsidised by large corprate customers and users of the Sydney-Melbourne coax cable and only a few metropolitan exchanges made what could be called "a profit". As these cost went down, the urge for privatisation increased.

Sol's furure plan would likely have been to ditch all his non-profitable rural customers (as he did in his previous company) or ask for even bigger taxpayer subsidies to meet his USO obligations - a cost that used to be borne by Telstra entirely.

*When was the last time that shareholders made business decisions in a private company?*

Wobbles, you are confusing mums and dads with institutions here.
No CEO would go ahead without institutional support on most issues,
he would soon be out of a job. But those things are not voted on,
that is what "institutional briefings" are for.

*The arrangement we have with supermarkets is more like a cartel*

Nonsense, the tv stations love to play that one up, but being
public companies, we know the figures. Coles lands up with around
3c in the Dollar as profit, Woolies around 5c, due to more efficient
logistics. They would lose more then that through spoilage and
pilfering.

But check out their large suppliers, global companies like Nestle,
Unilever, Kraft, Simplot, who manufacture multiple brands. I
once heard that Nescafe was Nestle's highest margin earner, with
something like 40%. It seems that these guys have higher margins
in Australia then in other parts of the world, but they dictate the
terms, Coles and Woolies get the blame. When Aldi tried to import
cheaper Nescafe from Indonesia, all hell broke loose.

IGA has 8000 independant retailers operating, but they find it hard
to compete, as its an extra cost in the supply chain to have another
wholesaler like Metcash make a profit too.

Yes, equipment costs are lower, but there is more to a telco then
equipment in exchanges. Those lines cost money to maintain, wages
go up every year, Telstra to its credit has always ploughed more
money into infrastructure. But once a line is established, unlike
power companies, they don't need to burn coal to feed the lines.

If I sit on my phone all day or only make a couple of calls,
costs are pretty similar. That was my point, when Telstra was
charging 9$ an hour for internet access, going back 13 years.

People won't use the thing and pay them anything, if they charge
too much, which is what the old Govt run Telstra was doing,
as it screwed the consumer for every Dollar.