Labor's broadband plan breaks Telstra's squeeze on Australia's assets

Adam Turner
Sunday, 25 March 2007 18:59

Opinion and Analysis

Prime Minister John Howard responded to Labor's broadband plan with; "Why should we use $2.7 billion that's been locked up for future generations, why should we use that to fund the provision of something that the private sector ought to provide in a normal market situation."

The answer is because the private sector isn't providing it. The reason why is because the Howard government has failed Australia by letting things get to the point where Telstra can hold the country to ransom in order to get its own way. Regardless of what Howard has to say, his Communications Minister Helen Coonan has failed to break the deadlock between Telstra, its competitors and the regulator that is keeping Australia in the slow lane.

Howard and Coonan are deluded if they have faith in Australia's toothless consumer watchdog to resolve the issue. The Australian Competition and Consumer Commission is as useless as a one-legged man in an arse kicking competition - these are the same people who seem genuinely surprised every time the price petrol goes up before a long weekend.

Labor's plan will break the Fibre to the Node deadlock, get the infrastructure built and ensure Telstra is never in the position to hold Australia to ransom again. The government's response is to continually accuse Labor of "raiding the Future Fund". Coonan sounded like a broken record during her interview on the ABC TV's Lateline. She used the phrase four times, five if you count "crash through the Future Fund".

What good is a future fund for tomorrow if you're flushing away the country's future today? The Howard government's alternative to Labor's plan is the Australian Broadband Guarantee. It aims to spend $163 million to subsidise internet access for remote Australians, but it doesn't break the Telstra monopoly that got us into this mess in the first place. Nor does the government's separate $600 million Broadband Connect program, which aims to expand broadband coverage to 95 per cent of the population but still maintain the status quo.

Maybe the Future Fund is the wrong place to find the funds, that's one for the economists to debate, but that doesn't mean Labor's plan is a bad idea. Nobody denies Telstra has Australia by the balls. Labor's broadband plan aims to break this grip, while the Howard government's programs aim to keep handing over cash in the hope Telstra doesn't squeeze any tighter.