Estens gives Telstra a passing grade

Speaking before the report's release, Prime Minister John Howard indicated the report backs the government's plan to sell the remainder of Telstra.

"The report will indicate that what the Government and Telstra have done over the past few years in particular has lead to a very significant improvement," the Prime Minister said.

According to a statement issued by the inquiry: "The Inquiry has been generally impressed by the extent of commercial service development over the past two years, both by Telstra and other service providers. The Inquiry believes that promoting competition is a key way to ensure these improvements continue into the future."

However, the Universal Service Obligation was found to be an ineffective mechanism "for providing broad consumer access to an increased range of services in the future. There are a range of other more appropriate policy options available to the government to achieve equity objectives in the future".

It was recommended that the ACA and the Government identify the worst performing rural exchanges, with Telstra required to provide a strategy and timeframes for improving their performance.

The Inquiry found mobile services to be adequate but recommended that the government continue its satellite phone subsidy. The Government's Internet Assistance Program was found to have helped dial-up users, but the inquiry recommended Telstra be held to a licence condition that guarantees dial-up speeds.

The report also found that Telstra failed to wholesale ISDN on an equitable basis and that pair gain copper lines adversely affect data throughput.

"In particular, the Inquiry is recommending the Government should require Telstra to give a formal undertaking to upgrade its remaining radio concentrator (DRCS) and to address the issue of poorly performing pair gain systems," the statement said.

The Inquiry also recommends a number of subsidies and other schemes to improve access to higher bandwidth services in the bush. A series of regular service reviews was also recommended, with the Government obliged to publicly respond to their findings.