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It seems my previous post was quite timely. Yesterday the Federal Government released its policy on broadband. Of course, one can debate whether this was ‘forced’ by the Labor party’s pre-election broadband policy release.

The whole area of telecommunications policy is pretty complicated - we are still in a, and it will take a long time, transition phase between a monopoly government owned provider and a truly de-regulated competitive market situation.

Personally I’m not buying the ‘Australia’s behind’ arguments and I think the whole case for the ‘importance’ of broadband might be a little over stated.

What is obvious though is we can’t turn back the clock. Having flogged Telstra off (the government now holds around 17% in the future fund) the government needs to push on with telecommunication de-regulation reform. The key to that reform, and most of the debate in my opinion, should be to address the gaping hole in the current system which is that Telstra owns the bulk of the infrastructure.

So, if the goal is a de-regulated competitive telecommunications market, there has to be some way to get the other private players investing in infrastructure. The way to do that - this isn’t rocket science - is to ensure private companies can see a reasonable return on their investment over time.

The labor stance on broadband doesn’t make much sense to me… consider this brief Telstra chronology:

• 1998 & 1999 - flog half of Telstra for A$14.24 billion (’T1′, 1998) & A$16.04 billion (’T2′, 1999) [1]
• 2006 - flog most of the rest of Telstra (’T3′ = 33%) for A$15.5 billion [2]
• 2007 - government holding 17% (about A$9 billion) of Telstra in the future fund [3]

So, as a matter of policy, the Australian government (presumably with the blessing of the voters - they are in their 4th term) has spent nearly a decade divesting itself of capital investment and responsibility for telecommunications infrastructure in this country. To the tune of about A$45 billion dollars and still, on behalf of us all, holds about A$9 billion in investment in Telstra.

So, why would you, as a government (current or next), give away A$4.9 billion (labor policy) of this money re-investing in infrastructure which you’ve just spent 10 years devolving yourself of?

And I say give away because presumably it will be private companies who will profit by selling access to this infrastructure? Or is the government going to manage it (recreate a government telecommunication provider)? Or is the government going to take more commercial share-holdings in private telecommunications companies (when it already holds 17% in Telstra) having just ’sold’ most of them off?

On an initial glance it seems the Liberal stance at least goes in the right direction, and that is:

• get non-Telstra infrastructure happening by convincing investors there’s going to be return on investment (right regulations, competitive bidding for markets etc)
• following on from point one, get the risk of that investment (and the profit) in infrastructure into the private sector (and off the tax payer), and
• cover the obvious gaps in provision for rural Australia by investing (or subsidising) in that bit of the infrastructure that no private company (especially Telstra) is going to touch without subsidies (sort of a variation on USOs - but spread around)

Or maybe this is another situation where one simply shouldn’t apply ‘common sense’ to popular political issues?

It seems unlikely we’ll get any sensible debate presented within the media - given on a ‘respected’ outlet, the ABC, in Ali Moore’s interview with Senator Coonan, she (Ali Moore), was constantly incorrectly quoting 12Mbytes/sec at the Senator when in fact it is clear from governments documents etc that what we are talking about is 12Mbits/sec… never mind, it’s only a factor of 8 error… (12Mbits approximates to 1.5Mbytes/sec and conversely 12MBytes/sec approximates to a connection speed of 96Mbits/sec - yes please *grin*)

Other notes:

• wheres is all the T3 money going?