What if Australia held a broadband party and nobody came?

Stuart Corner
Tuesday, 21 October 2008 17:22

Opinion and Analysis

Delivering its latest dose of vitriol in the increasingly vicious slanging match over the national broadband network, Telstra has branded the Optus 3G network a "laughing stock". But it is Australia that is fast becoming the laughing stock of global telecommunications with the government being held to ransom by opposing forces and erstwhile participant AAPT/Telecom NZ stirring up trouble from the sidelines.

What started the latest round in the long-running war of words between Telstra and its major competitors was a comment from Optus CEO Paul O'Sullivan that "Optus and the SingTel group stand ready to make [a] large investments in fixed line – if the incentives are right. But if the Government simply does a cosy deal with Telstra, and fixed line competition suffers in the process, then we will look for more attractive places to put our capital. So, no doubt, will many other potential investors."

He is simply saying the equivalent of what Telstra has been saying for months: that if the government does not agree to the NBN being built on Telstra's, terms Telstra will invest its money elsewhere; most likely in competing infrastructure in Australia, but CEO Sol Trujillo has suggested overseas investments as a possibility.

However for  his comments Telstra has branded O'Sullivan as "the true bully of Australian telecommunications." Telstra spokesman, David Quilty, claimed that: "If it was serious, SingTel Optus, whose parent is majority owned by the Singapore Government's sovereign wealth fund, could put an end to this farce today by making the necessary financial commitment to building the National Broadband Network.

Of course it could, just as Telstra could have done three years ago. But Telstra consistently claims it is safeguarding its shareholders' interests because the regulatory conditions are not right to enable it to make a decent return on such a massive investment. Yet when Optus suggests that its parent might apply the same standards when deciding where to invest its shareholders' funds - with many burgeoning Asian markets to choose from - it is branded a bully.

And on top of all this we have Paul Broad, CEO of AAPT - an erstwhile partner in the Optus-led Terria consortium expected to bid against Telstra to build the national broadband network - doing a splendid 'the-emperor-has-no-clothes' act and asking whether we really need this broadband network that the Rudd Government is desperate to spend $4.7 billion dollars of taxpayers money on.

Broad was reported in The Australian today saying "We have got to come clean and say, does this investment really stack up?...We have ADSL 2+ out there today in metro Australia and consumer demand is not such that we have been stretched to the eyeballs... Rather than have this debate through a bidding process, there should be an independent, non-aligned body - and the Industry Commission would be a good place to start." Hear, Hear.
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