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Now for something different: Telstra ripped off

15 Sep, 2009 03:26 PM
JUST because Sol Trujillo has departed, it doesn't mean Australia is without a telecommunications bully capable of flying off the handle and needlessly trashing relationships without due regard to a more reasonable culture of negotiation and consensus-building.

Stepping up to take Trujillo's title as chief head-kicker is one Senator Stephen Conroy. And there's a good chance that he'd take that description as a compliment.

Conroy's form as a Labor factional bovver boy is on display in today's rambunctious "my way or the highway" ultimatum to Telstra shareholders. In some ways it's a shame Trujillo isn't still around - his response would have been memorable.

What's missing from Conroy's swingeing attack on private property rights in his attempt to promote greater competition is the necessary admission of culpability: the perceived problem of Telstra competing with those who would like to have access to the network Telstra owns is all the Labor government's fault - not the fault of Telstra's shareholders who are now being ordered by Comrade Conroy to suck it up for the greater good.

No, not the fault of this Labor Government, but the previous one that stuffed up Telstra's privatisation in the first place.

It's a bit rich that Conroy now wants to fix his predecessors' mistake by lumbering the cost and loss of rights onto the people Canberra encouraged to buy Telstra shares.

It's a basic principle of half-decent government that if it wants to acquire property from individuals, it must fairly compensate them. There's zero hint of that in Conroy's ultimatum to Telstra to functionally separate, to treat its competitors are nicely as its own customers, to facilitate the cherry-picking of key customers while still having to provide an onerous "Universal Service Obligation" and quit its Foxtel holding and ownership of the hybrid cable Foxtel uses.

That Conroy is taking a cricket bat to the heads of Telstra shareholders when he's yet to work out just how his National Broadband Network thingy might really function is simply thuggish.

Conroy has talents, but calm and reasoned administration tends not to be mentioned as one of them.

There is a great and somewhat inevitable opportunity - or there was until today - to reasonably fix the mistake made by Kim Beazley and Paul Keating through the NBN process. Telstra's network could fairly form the backbone of the NBN at a great saving to taxpayers and at a fair price to Telstra shareholders.

Perhaps Conroy is just applying Beijing-style leverage to those negotiations.

Forcing Telstra to sell its Foxtel stake is somewhat more interesting and lacks the clear "greater good" argument that can be applied to functional and perhaps actual separation.

And making Telstra a forced seller with Murdoch and Packer having first dibs is a dubious proposition. Is this why Kerry Stokes has been so keen at get a slice of Packer's Foxtel pie?

There's also a degree of injustice for those with long memories. Telstra was the patsy in the Foxtel syndicate, losing a fortune rolling out the cable while Murdoch and Packer made a fortune selling content to run on the cable.

Given the constant attacks on the Rudd Government by Murdoch media, one is left to wonder why Conroy would now want to do that camp such a big favour.

Disclosure: The Pascoe family super fund, like the super funds of the vast majority of Australians, holds Telstra shares. And I'm an Optus and Telstra customer.

Michael Pascoe is a BusinessDay contributing editor.

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The "National Broadband Network thingy" was never a realistic proposition. It was and is simply a bovver boy standover of Telstra.
Posted by Ted O'Brien, 16/09/2009 3:19:09 AM
This government, having just sold a big parcel of its Future Fund holding in Telstra, is as guilty of insider trading as anyone in corporate Australia has ever been. They should be hounded to the courts.
Posted by Bob, 16/09/2009 4:27:47 AM
"It's a basic principle of half-decent government"...and here is the guts of the problem, no basic principles, and no decency whatsoever. Who voted for these idiots??
Posted by bill, 16/09/2009 5:22:00 AM
What right does the government have to meddle with private enterprise. Even worse they are effectively taxing the shirts off those investors who have stuck with Telstra as part of their superannuation portfolio.

The only consolation for people will be when the Rudd Laborites are be consigned to another 10+ years in Opposition - so bring on the Double Disillusion as soon as possible so we can get rid of these economic idiots.

Posted by gordons49, 16/09/2009 5:26:26 AM
Being a Telstra shareholder and customer I believe that the company needs to be split. In fact, it should never have been sold as one company. I don't understand how this was Keating and Beazley's mistake - it was the Howard government that privitised Telstra.
Posted by Farmer Dave, 16/09/2009 6:13:03 AM
Telstra-Customer Service...bah humbug. I stopped using them years ago when it was impossible to talk to anyone. I am a sharholder as well but would rather deal with someone that treats me as a customer.

I pity the poor people that have worked so hard for a company that no longer has a soul. Perhaps Telstra is getting what it deserves.

Posted by Just wondering, 16/09/2009 6:26:35 AM
After been put through the Telstra customer service and product mincer - this is the best news I heard in months!
Posted by tigerdicky, 16/09/2009 6:51:21 AM
Don't blame the current government for fixing something the Howard government didn't have the guts to do. People who purchased Telstra shares bought a great income stream which still has upside if Telstra management can stop their dog-in-the-manger behaviour
Posted by Farmer John, 16/09/2009 7:57:30 AM
I am a Telstra shareholder (small one), and it is my mistake, and I do not blame the government for that. By the way, it is atually Howard and team who privatised Telstra.

As a customer, I decided to cancel my contract with Telstra because the service I got was realy poor, yet we in Australia paid much more for a poor phone service. I aprove what the current government is doing to improve telecommunications.

Posted by Greener, 16/09/2009 7:58:21 AM
Once you leave the major cities, Telstra is all there is...ask any user of a mobile phone in northern Australia. So for all it is worth, Telstra does provide a reasonable service.

Maybe the Government should be paying a much fairer price for the USO, especially in remote areas, as well as raising the bar as to what this actually means.

Who is actually losing if Telstra is split? Surely the bits have value, and I can envisage a split with existing shareholders getting the action.

A lot of companies have done EXACTLY that eg BHP and what is now Bluescope as well as Onesteel.

Posted by R See 1, 16/09/2009 10:06:24 AM
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Stepping up to take Trujillo's title as chief head-kicker is one Senator Stephen Conroy. And there's a good chance that he'd take that description as a compliment.
Stepping up to take Trujillo's title as chief head-kicker is one Senator Stephen Conroy. And there's a good chance that he'd take that description as a compliment.
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15 September, 2009
14 September, 2009
POLL
Q: If a federal election were held this weekend, for which party would you vote?

Labor
(13%)

Liberal
(30.8%)

Nationals
(35.4%)

Greens
(8.1%)

Family First
(1.6%)

Independent
(8.6%)

Other
(2.6%)

Total Votes: 1073
Poll Date: 13 September, 2009

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