Labor ready to make love not war with Telstra

ALP communications spokesperson Stephen Conroy told ZDNet Australia that if Labor wins the election, it will mean a fresh start in the relationship between the government and Australia's telcos.

"I have a good relationship with all the players, I meet regularly with Telstra and regularly with Optus," he said, adding that he will "start on a fresh foot" with the telecoms companies.

Conroy's comments come in light of a worsening relationship between Coalition Communications Minister Helen Coonan and Telstra in recent months, culminating in a court case between the Minister and the telco earlier this year.

Nevertheless, Coonan told ZDNet Australia that the relationship between herself and Telstra is good, saying of a recent Australian Broadband Guarantee funding deed between the government and the telco: "I think it's a very positive sign they are a participant in that."

Borrowing from Telstra's Phil Burgess, Conroy told ZDNet Australia there are two approaches to dealing with the incumbent: "You either love Telstra or you fight Telstra".

Conroy has already promised to be tougher on the telco if elected and said he will pursue a "more robust approach" to operational separation.

While the ALP may pursue a different tactic on operational separation to the current government, Conroy said a Labor administration would let the Coalition-approved OPEL WiMax network stand.

"We will respect the contract, we will honour the contract," he told ZDNet Australia.

"It's up to OPEL what they're going to do about the fibre network that will run by their door."

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Talkback 7 comments

    Labor bad for TelecommunicationsJonathan T. -- 20/11/07

    Labor is likely to be a bad choice for Telecommunications, particularly with regards to relations with Telstra.

    Whilst they're optimistic that they can "make love, not war" with Telstra, the situation is a lot more complex than they have shown to have realised.

    The Coalition has made some pretty tough decisions when it comes to Telstra, decisions which I believe a Rudd government wouldn't be prepared to make, yet are of benefit to the wider community, not solely Telstra shareholders.

    Labor have once again shown a series of slogans to convince voters that they have a plan, but practically nothing by way of actual policies. This in itself represents high risk of things getting worse.

    In the Telco sector, this applies to both Telstra and Labor's "World Class Broadband" (another slogan without actual policies).

    In recent times, the Coalition have shown that they're keen on opening up the market through initiatives such as OPEL and the strain between Sol and Coonan is a result of this - is it necessarily a bad thing that Sol has such a bad attitude toward the government? When you consider his agenda, I certainly don't.

    ...but better than the CoalitionAnonymous -- 20/11/07 (in reply to #320090234)

    I live in a large regional town and am in the situation where telstra have adsl2+ dslams in almost all exchanges but they have only enabled it in the one exchange where a competitor has installed equipment. If a government dept managed the infrastructure (eg old telstra), then that equipment would be functional and wholesaled to competing providers (ala adsl1). Providing Regional/Rural internet access is already unprofitable, without forcing providers to provision a second set of broadband network infrastructure making the situation even less profitable.

    quote by Jonathon T: "The Coalition has made some pretty tough decisions when it comes to Telstra"

    The Coalition HAS made some tough decisions, but leaving core national communications infrastructure to the private sector was a stupid one. I expect that is why a Rudd govt wouldn't have made it ;)
    The privatisation of Telstra was a mistake, and a govt owned, wholesale communications provider needs to take it's place in order for Regional Australia to stand a chance at getting decent comms for the future. Will Labor do this? I don't know, but I know the Coalition won't...

    LaborJonathan T. -- 20/11/07 (in reply to #320090242)

    In response to the above, if you look at the extent to which State Labor governments are prepared to privatise public utilities, I'd expect the results would have been similar with regards to privatisation.

    The real problem is that based on what Labor have said, they're prepared to appease Telstra without realising the implications of this - the reality is, a minority of Telstra shareholders will benefit and the rest of the country (particularly rural which is the least profitable to Telstra) will ultimately suffer.

    ADSL2+ is a highly inappropriate medium for rural broadband and it makes sense to investigate alternative technologies for last mile delivery. This is one of the findings before OPEL took form and that's why technologies such as WiMAX are being investigated. On this, it would be unreasonable to force any provider to invest millions into ADSL2+ deployments that service a very narrow area with far less than ideal throughput.

    Most of the conflict between Telstra and Coonan has come from Sol. Sol has the responsibility of delivering results to shareholders and he seems quite prepared to do so at any cost.

    Unless Labor is prepared to come up with some serious changes that are going to move Telecoms forward in this country (slogans and tough-talk don't cut it), I'd stick with with the Coalition.

    What Tough Decisions?Malcolm Moore -- 21/11/07 (in reply to #320090234)

    Jonathan: If you are an advocate for Liberal Competition, then you have to accept that almost all the reinvestment capital (profit) has and will be creamed off to pay for advertising, marketing, dividends, sponsoring, executive payments, and the tiny remainder is left to maintain the infrastructure.

    Telstra Wholesale is an Infrastructure business, while Bigpond is the Competitive reseller. As long as the Competitive Regime strangles the living daylights out of Telstra, the TLS security prices will contimue to flatline.

    The 1982 Davidson Report was wrong, and we have to address the source of the disease and not fiddle with the symptoms it has caused.

    There are only a few tough decisions so far:

    The process to extricate the distribution of Telstra securities out of the ASX and move these into BigPond as a competitve reseller.

    The process to structure Telstra Wholesale - so it can focus on providing the necessary infrastructure for Australia without the Competitive Regime stopping its every advance.

    Neither major party have got this right, and in the past decade one Liberal Coalition Party totally missed every oppportunity to make any hard decisions like:

    Repealing the Competition Regime from Telstra.

    Structurally separating Optus and other would-be Telcos in the same vein as Telstra is to be split.

    Merging the Telecomms infructures to work synergetically instead of against each other.

    The Coalition has made some pretty tough decisions when it comes to TelstraAnonymous -- 20/11/07

    Having been in the Telco industry for over 25 years, without Telstra there would be no Infrastructure for any of the other foreign owned telcos to skim the profits off, The fighting between the Liberals and Telstra has lead to a real decrease in spending and red tape for Telstra, which has resulted in decreasing investment in the bush and urban areas.

    It has also resulted indirectly in over 50, 000 skilled workers being laid off, and a real lack of skilled staff being trained.
    Wasting money on the OPEL deal which won't cover the area the Gov't say it will, will see less investment all round .

    So vote back in Liberal if you want our communications to continue going backwards.

    Synergy Good for Aussie TelecommsMalcolm Moore -- 21/11/07

    Over the last decade we have witnessed spiralling costs of telecommunications to pay for the costs of Competition, meanwhile technology advances have plummeted in costs. Telecomms user costs should be a small fraction of what they are now, and we should have telecomms services everywhere - and all high speed!

    This situation is a management calamity where Alston and now Coonan, like Cinderalla's ugly sisters trying on the Glass Slipper, have forced the Competition policy down aussie telecomms throats! The Glass Slipper has all but broken and it should be painfully obvious to these Senators that enforced Competiton is totally the wrong policy.

    The right policy is Synergy.

    The cost of Competition (war) is extremely expensive and in this telecomms case, the major costs are competitive marketing, advertising, multiple managements, unnecessary duplicated Inter-Exchange Networks (IEN), unnecessary duplicated Customer Access Networks (CAN), and the extremely inefficient processes in facilitating unbundling the CAN for alternate DSLAM to provide competitive ADSL equipment.

    The productivity gains in telecommunications are primarily due to technology advances and very little else.

    When the Melbourne Sydney Coax was replaced by Optical Fibre in 1987, this made long distance calls almost as cheap as metropolitan calls (for that link - but not elsewhere). It has often been said that the most expensive item in constructing an Optical Fibre link is 'digging the hole to lay the fibre'. (The terminal and regeneration equipment is also very expensive.)

    Only very recently has the technology of cost effective 1 Gb/s and 10 Gb/s SDH rings (several 100 km in circumference) become financially viable. This technology is being installed in country regions by "you know who" to support the major inter-capital Mobile and Internet backbones - and these rings will synergetically provide the backbone IEN for country regions to have high speed broadband. It takes about 5 years to programme this infrastructure on a national basis - not the so called 'flick of a switch'!

    Far cheaper digital transmission and switching techniques rode on the back of the advancing technologies in printed circuit assemblies utilising similar silicon chips to those used in personal computers. These technologies made the primary reason why customer service standards have risen, and the need for maintenance has been almost eliminated - it had nothing to do with Telecomms competition.

    (The prime reason why Service Standards have not dramatically risen is that 'Shareholder Interests' come before customers - in a competitive world!) This is a prime reason why Telstra needs to be structurally split - so that the Telstra Infrastructure (without competition or an ASX listing) can get on with its business of providing national wholesale infrastructure, and Bigpond (with an ASX listing) can be one of the competitive companies to resell wholesale telecomms services to the retail public.

    I would like to thank Competition for forcing those ugly Hybrid Fibre Coax (HFC) cables to be strung (mostly in duplication) around most suburban streets from about 1992. In today's terms, this duplicated HFC network cost us all about $10 Bn, when the same cound have been done better for about $2.5 Bn without Competition, but with Synergy.

    Don't get me started on the multiple duplicated Mobile Base Stations, which is another Competition policy fiasco. The telecomms equipment manufacturers are laughing all their way to their respective banks (and guess which country manages most of these manufacturers? It sure ain't Australia!

    Instead of mass installing DSLAM equipment at local exchanges to facilitate ADSL on all lines in one bulk programme, the Unbundled CAN policy has caused this to be very expensive individual connection wiring. I believe the contract price is about $150 per pair, and the bulk price would have been about $150 per (100) block (Thanks Co

    Skilled Workers DispersedMalcolm Moore -- 21/11/07

    Anonymous, from my telecomms experience I believe that you are right in almost everything that you stated :)

    The 50,000 or so highly trained technicians that have been flicked from Telstra in the past 15 or so years was mainly due to technology advances where the equipment MTTF (Mean Time to Failure) has increased from a couple of years to many centuries.

    Read that backwards, where you would have say 5 techs on a 12 floor exchange site, you now have say 0.1 tech for every 12 floor exchange site - and still maintaining the same standard of service. Most techs are now highly untrained / unskilled in comparison.

    Almost all the technicians work is now on the Main Distribution Frame (MDF), and the Customer Access Network (CAN) - which incidentally did not yet go through a technology revolution - apart from having ADSL eqquipment installed ad-hoc (thanks to competition introducing tremendously expensive inefficinecies in these areas).

    The metropolitan Inter-Exchange Network (IEN) was copper pair to digital switches. It is now all Optical Fibre links to Routers/Switches. You could read this as almost "No Maintenance".

    Get this: I believe that the ACCC still incorrectly thinks that the Optical Fibre used in the IEN is part of the CAN, and apparently the DCITA has still not picked up on this glaring error in technology network structures! The mind Wobbles!!

    This might explain some 'very stupid' decisions!

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