Telco/ISP

Ministers line up to brand Minchin a 'Luddite'

"@ sydneyla I don't read it that way at all. For NBN to be commercially viable, they can't have a competing copper network. I am guessing that Telstra will be forced to divest the copper network ..."

By RDEFCON1

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Oct 22, 2009 6:47 AM

Debate over telecommunications legislation gets ugly.

You know that the debate over telecommunications competition is getting ugly when somebody pulls out the "L" word.

It's been eight years since the international press bestowed Australia's former communications minister Richard Alston with the title of "world's biggest Luddite".

A "Luddite" was historically a nineteenth century artisan so upset at the new ways of the industrial revolution that he would take to destroying mechanised looms. It is now used 'derisively', according to Wikipedia, to describe a person opposed to technological change.

With a report into internet filtering due for release, Communications minister Stephen Conroy today made the timely move to brand his opponents with the slanderous term before it can be levelled at him.

Conroy twice today described his opponent - shadow communications minister Nick Minchin - as a Luddite to denounce the opposition's calls for delays to the Telecommunications Legislation Amendment Bill, which intends to force Telstra to split in two.

Conroy said that Minchin and the Liberal Party "deserve the strongest condemnation" over the party's plan to defer the bill.

Conroy said that "not everyone in the National Party agrees with the Luddite position being adopted by Nick Minchin."

"Nick Minchin is being exposed for being a complete Luddite," he later said.

While Conroy was the only minister pulling out the "L" card, his colleagues also spent yesterday hurling a torrent of abuse in Minchin's direction.

In Question Time, Prime Minister Rudd said that "if the Liberals had their way, Australians would be left using carrier pigeons for the future rather than accessing an internationally competitive broadband network."

Finance Minister Lindsay Tanner, who has joint custodianship of the NBN project alongside Conroy, was diplomatic, but no less scathing.

"Under the regime that we inherited from the Howard government, Telstra remains almost two-thirds of the entire telecommunications sector, earning the vast bulk of the profits," he said.

"The regulatory regime is comprehensively intrusive, burdensome and excessive, and it gives Telstra the incentive to focus much of its energy on 'gaming' the regulation rather than innovating, improving its services or reducing prices.

"Under the Howard government the biggest growth sector of the Australian economy was telecommunications lawyers, and Telstra were employing a lot of them."

Comments: 19

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sydneyla Oct 22, 2009 8:17 AM	Congratulations Senator Minchin for defending an Australian company against outrageous blackmail by the Rudd Government. If Mr Rudd wants to fund a NBN then he is at liberty to do so, provided he has done a costing and business case for a venture that is being funded by taxpayer money.
Maxxi Oct 22, 2009 8:47 AM	Congratulations Mr Minchin for defending a monopoly company that has brought in ruthless American management to nobble the Australian telecoms market, that brought their own share orice down from $5.20 to $3.20 in that time, has fought the ACCC for over a decade to avoid the regulation that applies to the rest of the industry. Congratulations Mr Minchin for defending a company that has ruthlessly destroyed Australia competition and cost Australian taxpayers $billions, that has been blackmailing Australian taxpayers and Australian companies for years. Congratulations Mr Minchin for defending a company that has broken every single committment and agreement they made when privatised, has decimated their customer service levels to Australian taxpayers, has held back Australian telecoms developments and has broken Australian privacy laws many many times. Yes Mr. Minchin, that is a good call, what Australia needs is a return to ruthless and greedy management by arrogant American execs, who desert the ship when their absolute power is taken away by a Rudd government that at least has the courage and determination to take on the childish behemoth at last, and fix our market to the benefit of all Australians...
sydneyla Oct 22, 2009 10:04 AM	I will always defend an Australian company against the disingenuous rubbish that Telstra opponents publish. Maxxi it is obvious, that for whatever reason, your interests dictate that you make deceitful accusations against Telstra. Telstra has, and will always operate within the boundaries of the Australian law and the fact that you promote such statements demonstrate your dishonour.
Digger11 Oct 22, 2009 10:17 AM	@Maxxi 10000% correct. You have either worked in the Telco arena for many years or are just very perceptive. The greedy Telstra shareholders and ill-informed Telstra staff just do not want to understand the reality of what those Yanks did to Telstra. Telstra has at last been given what they have been dealing out to every other Australian Telco for the last decade - and they cannot stand it!!! boohooo, I am starting to tear up. When bullies get their day in court who really cares ??? maybe their misguided and confused Mum and Dad ? that's about it. I was at a presentation recently by Mike Quigley and he said be could not believe how many CV's he had for Regulatory Lawyers applying for NBN roles - the stack on his desk was toppling over. All caused by Telstra and their bullying and "we will out muscle you all with legal power" attitude. Who's laughing now Telstra ???? hahahahaha
listohan Oct 22, 2009 11:47 AM	Sydneyia, If a business plan had been done when the railways were being planned, would it have anticipated their use by the three diesel locomotive freight trains which power up and down the lines these days? Or even the concept of double-decker suburban electrics?
anonymous Oct 22, 2009 11:52 AM	Maxxi is right on all counts. It's difficult for the average person (and, apparently, Nick Minchin) to comprehend the damage that the incumbent monopolist has done to our GDP and national interest, not to mention 22 million people. As for sydlala - your imbecillic obsession was mildly amusing the first time, worn out by the 100th time, and now so completely turns everybody off that your rants have a reverse effect. Like the Yankee Doodles who took their carpetbags of our cash back home, you have passed your use-by date.
Allen Oct 22, 2009 12:37 PM	This seems almost like a Religious debate rather than a reasoned discussion. Conroy was either monumentally naive to think there would be no Telstra opposition or he is simply using this as a ploy in the negotiation to roll the relevant parts of Telstra into the NBN. Which gets the seperation he wants by default. Not that the NBN or pulling Telstra apart will solve solve the monopoly problem. You are aware that the government expects the NBN to give a return to taxpayers right? Of course NBN co are stocking up on lawyers. As soon as the new monopoly tries to pass the actual costs on to customers you can bet the ACA is going to get involved. It will be ironic to see Telstra on the other side of the fence along-side Optus and the others...
b Oct 22, 2009 1:02 PM	To all Telstra shareholders: the separation of Telstra is likely to have no effect on Telstra's share value. If separation was such a bad thing, then surely the value would have dropped already. It has not dropped, because Telstra's future under the NBN remains as uncertain as otherwise. Who wants to buy shares in a company with an uncertain future? Maxxi, you are correct on all points but one: Telstra's evil behaviour is a result of the regulatory framework in which it operates, not because of it's evil American execs. The government botched the original privitisation; the government now owes it to Telstra, its shareholders, its customers and its competitors to put it right. It is my hope that the current legislation will promote competition and innovation in the Australian broadband market.
Mordd Oct 22, 2009 2:38 PM	Maxxi already said it better than I could. I for one give Senatory Conroy my full backing in forcing Telstra to functionally seperate. Honestly the liberals never would have had the guts to take the risks needed for the NBN or functional seperation of telstra, but experience in England and elsewhere proves this is exactly what Australia needs and will act as a major catalyst for growth across most industries in australia as a result. To me the NBN is the Harbour Bridge of the 21st century, just when they built the bridge it wasn't expected to hit capacity (and didn't) for a good few decades down the track, its the same with the NBN, and it does take a government willing to look beyond their own short term they are elected for to actually implement something like this that will set this country up for 50+ years to come.
Mordd Oct 22, 2009 2:40 PM	Hmm, me suspects sydneyla has a financially vested interest in Telstra from the comments posted, anyone else smell a PR firm employee?
RDEFCON1 Oct 22, 2009 3:41 PM	You're all nuts. Except Allen, who at least had something reasonable to say. wrt the comment regarding Telstra earning the bulk of the profits... of course they do, and should - as they own the bulk of the infrastructure. The market should reward the companies that make the most investment. wrt the comment regarding the instrusive and burdensome regulatory regime, I agree wholeheartedly with Lindsay Tanner. However he is wrong about the incentive side. The incentive created is for Telstra's competitors the incentive to game the regulator rather than building competitive infrastructure. Telstra can sit back and do nothing because their competitors are more interested in getting what they can risk-free than they are in providing genuine alternatives to Australian consumers based on their own investment and innovation. NBN might break Telstra's 'monopoly' on the telecommunications market in Australia, but it will only replace it with a much stronger NBN Co. monopoly - and ultimately leave all Australians worse off.
RDEFCON1 Oct 22, 2009 3:42 PM	You're all nuts. Except Allen, who at least had something reasonable to say. wrt the comment regarding Telstra earning the bulk of the profits... of course they do, and should - as they own the bulk of the infrastructure. The market should reward the companies that make the most investment. wrt the comment regarding the instrusive and burdensome regulatory regime, I agree wholeheartedly with Lindsay Tanner. However he is wrong about the incentive side. The incentive created is for Telstra's competitors the incentive to game the regulator rather than building competitive infrastructure. Telstra can sit back and do nothing because their competitors are more interested in getting what they can risk-free than they are in providing genuine alternatives to Australian consumers based on their own investment and innovation. NBN might break Telstra's 'monopoly' on the telecommunications market in Australia, but it will only replace it with a much stronger NBN Co. monopoly - and ultimately leave all Australians worse off.
RDEFCON1 Oct 22, 2009 3:42 PM	You're all nuts. Except Allen, who at least had something reasonable to say. wrt the comment regarding Telstra earning the bulk of the profits... of course they do, and should - as they own the bulk of the infrastructure. The market should reward the companies that make the most investment. wrt the comment regarding the instrusive and burdensome regulatory regime, I agree wholeheartedly with Lindsay Tanner. However he is wrong about the incentive side. The incentive created is for Telstra's competitors the incentive to game the regulator rather than building competitive infrastructure. Telstra can sit back and do nothing because their competitors are more interested in getting what they can risk-free than they are in providing genuine alternatives to Australian consumers based on their own investment and innovation. NBN might break Telstra's 'monopoly' on the telecommunications market in Australia, but it will only replace it with a much stronger NBN Co. monopoly - and ultimately leave all Australians worse off.
RDEFCON1 Oct 22, 2009 3:43 PM	ps. I did not post that three times. ??
anonymous Oct 22, 2009 4:39 PM	OK, RDEFCON1, we'll blame the ghost of the Internet for your triple treat! There's a fundamental error in your monopoly comparison, and it seems you may be aware of this. Telstra is a network operator, but it is also the biggest service provider and a major content marketer. This gives the incumbent a vice grip on consumer access, which it has exploited to the detriment of other companies and ultimately all consumers. In the real world, it is laughable to suggest that any company could establish viable fixed-line competition against the huge cashflow, legalistic gaming and monopolist attitude of the incumbent. This means that all Australians are worse off, and have been for many years.
RDEFCON1 Oct 22, 2009 4:59 PM	@ anonymous That's just simply not true. In the (unregulated) mobile market, Optus, Vodaphone, and Hutch have all established competitive infrastructure and compete effectively against Telstra. They have an incentive to build their own infrastructure because they can't buy Telstra's at close to cost. In the fixed market, regulation has distorted the natural incentives in the market place - and resulted in an inefficient allocation of resources targeted at getting the most out of the regulatory regime rather than providing better services to customers. I don't disagree that there is a failure of competition, I just believe it is the regulatory regime - not malicious intent of a big bad corporation. Remember that the vast majority of Telstra employees are actually decent, hardworking Australians like you. They are not conspiring against the Australian people as those who demonise Telstra would have you believe. The goal should be the creation of a competitive telecommunications industry in Australia, where service providers genuinely compete to provide cutting edge technology, and high quality services, to Australian consumers and businesses. This will only be achieved through genuine competitive at both the Retail AND Wholesale level. Without competitive infrastructure, there will be no incentive to innovate on technology and network features, and while we may get a cutting edge network in the short term (say 8 years time), there will be no incentive for NBN Co. to keep it cutting edge into the future - and then no amount of retail competition will fix the fact that the introduction of a wholesale monopoly was extremely bad policy.
Maxxi Oct 22, 2009 5:34 PM	"b"... You are correct. The seed of demise was sown with the privatisation contracts, and a lack of enforceable remedies for contravention. I believe that we would all like to see and benefit from a healthy Telstra (two healthy Telstras....) as a part of a healthy and openly competitive Australian telecoms market... I agree with RDEFCON1 that there are many excellent folks in Telstra today, no question of that at all.
sydneyla Oct 23, 2009 8:41 AM	With the promise of the roll-out of a NBN to be a competitor for Telstra why the call for the separation of Telstra? Would not the two companies in open competition for the consumer dollar be a better proposition that one Government monopoly.
RDEFCON1 Oct 23, 2009 1:30 PM	@ sydneyla I don't read it that way at all. For NBN to be commercially viable, they can't have a competing copper network. I am guessing that Telstra will be forced to divest the copper network and not overbuild the NBN with it's own GPON. They may still provide wholesale services for backhaul, but the last mile access will be an NBN monopoly. Hence the debate about whether the USO will still apply to Telstra for the last 10%... and how that would work given Telstra would no longer have the copper network to deliver USO services over. In my view, the lack of clarity just reveals how little thought has been put into this by the policy-makers. They really have no idea what NBN will look like at the end.