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Telstra: holding the line? « Previous | |Next »
March 15, 2005

In Queensland they know all about the poor level of tele-communications service offered by Telstra:


In an op.ed in todays Australian Financial Review Barnaby Joyce, the National's Senator-elect for Queensland, writes that:

Only half of the Estens recommendations are in place...If curent regulations do not address the key concerns of the Nationals---parity of service, parity of price--and if there is no quip pro quo for regional Australia on the sale of a huge public asset other than a proposed reinvestment in the sharemarket, then the argument to sell Telstra is very unconvincing.

Though the Nationals are keenly aware of Telstra's market power, they will not succeed in gaining a full breakup of the telco as argued for by Barnaby Joyce. Will they succeed in cutting it down to size? Will they succeed in ensuring the the ACCC has enough fire power to prevent Telstra ridding roughshod over the market?

Will they succeed in directing a significant proportion of the $35 billion sale proceeds to infrastructure development beyond rural Queensland? Will they succeed in ensuring Telstra's rivals have access to its network at a reasonable price?

Will the Nationals be appeased without derailing the sale? Of course.

What is of deep concern has been the failure to erode Telstra's market power. The Howard government has a deep resistance to decreasing Telstra's market power, makes attempts to strengthen that power so as to minimize the threat of competition, and is offering an easy regulation regime post-privatisation. So a privatised Telstra will be able to continue to use the control of its network to frustrate competitors.

What will the Nationals do about that?

| Posted by Gary Sauer-Thompson at 1:44 PM | | Comments (0)