Paul Fletcher, director of corporate and regulatory affairs at Optus, slammed the AU$464 million program in an address to a conference on rural and remote communications in Sydney yesterday.
"If the program had been designed to improve levels of competition in rural and remote areas you'd expect the bulk of the funding going to Telstra's competitors," Fletcher said. "Instead we saw the bulk of the funding frittered away in smaller projects, and a lot go straight back to Telstra."
Fletcher argued that the National Communications Fund, which has seen a relatively small number of larger grants awarded specifically to infrastructure projects, had been more effective in improving competition in the Australian telecommunications sector.
Telstra's Universal Service Obligation (USO), which sees many of the the carrier's competitors subsidise Telstra's rural and regional services provision also came under fire, with Fletcher calling for the system to be revised before any further sale of the company.
"Rural communications policy needs to be improved so as to encourage players to deliver better services of their own rather than cross-subsidise Telstra's service," Fletcher said. "It is difficult for the other players to invest any further in rural services provision when we are cross-subsidising Telstra to the tune of AU$60 million."
He also argued that "one-size-fits-all" regulation, requiring high standards of service provision, was providing a further disincentive to smaller players, who were unable to guarantee high levels of service while they were dramatically expanding their customer base.
However, Fletcher's criticisms were not limited to national government policies, he said state governments should focus on using their telecommunications spend more aggressively in order to drive competition and improve infrastructure in their state.
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MD TownTalk Australia Ltd