Who's the April Fool?

Stuart Corner
Saturday, 04 April 2009 13:30

Opinion and Analysis

Remember, this is the Telstra that was definitely not going to bid for the NBN unless it got an iron clad guarantee from the government that it would not be forced into separation. Yet at the 11th hour it did submit a bid, of sorts.

This same lack of intimate knowledge of the Australian telecommunications scene applies to the various overseas publication who simply picked up the story and ran with it without giving any consideration to its possible impact.

This is not the first time that a story about Australian telecoms issues has been picked up by the global Internet news machine and blown out of all proportion.

A year ago almost to the day, at a panel discussion at the WiMAX World Asia Conference & Exposition, in Bangkok, Garth Freeman, CEO of Buzz Broadband - a small operator in Hervey Bay in Queensland (all of 200 customers) - described WiMAX as a "miserable failure". This and other disparaging comments were widely reported in the press worldwide, including leading newspapers such as the Washington Post.

Buzz Broadband's supplier, Airspan, had a very different, and entirely credible, account of Freeman's problems, but by that time the cat was out of the bag. None of the overseas reports bothered to really dig into the issue, and entirely on the basis of Freeman's widely reported comments, a senior Gartner analyst was moved to comment "WiMAX technology was found to be unacceptable for use with voice over IP (VoIP) due to high jitter and latency and 'nonexistent' line-of-sight performance beyond 1.8 miles, with poor indoor performance."

In the world of instantaneous Internet news being first becomes far more important than being investigative or analytic. And when things go wrong it's so easy to simply offload blame to the original source, or if not that one next up the chain.

This little 'joke' might have cost some investors a pretty penny, According to Business Spectator "Telstra shares started trading in the morning at $3.20 and hit a high during the day of $3.24. But after it became obvious the story was a hoax the price collapsed to close down 3.7 percent at $3.09." And it quoted one broker saying he knew people who had bought a million shares on the strength of the story.

As there was clearly no intent on the part of the perpetrators to mislead the market, it seems unlikely that anyone will face the wrath of ASIC. But if there is one lesson for investors, and anyone else, to learn from the whole sorry saga it is this: if you read anything on the Internet that is really important to you, find out who put it there in the first place and with what authority they speak and go and read that first posting before you act on that information. A good place to start is Google News: just look for the oldest report on any current news story.