Telstra's rural presence plan: it's all about futureproofing

Stuart Corner
Monday, 12 January 2009 12:50

Opinion and Analysis

To allay these fears, then communications minister, Helen Coonan, in a wide-ranging pre T3 address to the Adelaide Press Club in July 2005, announced plans for the 'Plan' saying: "I expect to be imposing a licence condition on Telstra by the end of the month, requiring it to maintain a rural presence. This is not negotiable – T3 or no T3 – Telstra will be required to maintain their level of service to the bush. Country Wide is expected to be at the core of Telstra's Rural Presence Plan and Telstra will be working over the coming weeks to present me with a workable and responsive rural presence plan.

"As well as imposing the licence condition, I will be providing Telstra with written guidance on the Government's expectations of the Rural Presence Plan itself." This requirement was duly imposed and a few weeks later Telstra published its first draft plan; to a barrage of criticism.

There had been expectations that the plan would somehow contain clear commitments to new initiatives by Telstra giving form and substance to the shadowy concept of rural 'presence' and that the meeting of these commitments would be evident by measurable outcomes, which would be defined in the plan.

It did no such thing. Shadow communications minister, Stephen Conroy was quoted saying that the document did not contain "a single solid commitment about what Telstra would do to improve rural services."

The Financial Review greeted release of the draft with the comment that critics had labelled the plan a "sham" that offered "platitudes instead of guarantees". It added that Telstra was expected to be pressured into revising the plan "to include targets that can be measured over the next three years to determine how country phone services will improve".

 Sure enough, the draft was rejected by Coonan on the grounds that. "it did not contain enough detail or enough forward commitments." She approved the final version in May 2006 saying that "Telstra needed to establish the document as a commitment to future action rather than just a statement of current or past action."

A lot has happened in the past three years. Telstra has taken Next G with data speeds at up to theoretical 21Mbps to a, claimed, 99 percent of the population. Optus and Vodafone have, as a result had to commit hundreds of millions of dollars to try and match this. Telstra claims to now be able to deliver ADSL to 92 percent of the population.

Maybe it is time to review the need for this plan. But the questions first need to be asked: Did Telstra meet its commitments under the first version?

So far as I am aware there was no clear mechanism ever set out specifying how Telstra's progress against the plan would be measured. After complaining about the lack of solid commitments in the first draft it's up to now minister Stephen Conroy to report on how Telstra has met whatever commitments it made in the version of the first plan as approved by the previous government and make sure it does not get away with "platitudes instead of guarantees" in the new version.

He could of course also respond to Telstra's complaints that the plan is unnecessary by reviewing the state of competition in rural and remote Australia, but that would win him no friends in rural Australia.