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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

Telstra v the public interest « Previous | |Next »
July 21, 2006

Fred Hilmer had an op. ed. in the Australian Financial Review last Wednesday where he argued that policy makers should not allow Telstra to protect its income at the expense of competition and national economic groowth. That is good economic sense. Who could argue against it apart from Telstra? From the government's perspective the most important concern is the national interest--the provision of a widely available high speed broadband at the cheapest possible price.

Hilmer's argument is that the regulatory function should be in the public interest and that there are a number of aspects to public interest:

Impact on the value of an enterprise owned by government is one part, but generally only a small part. The wider impact on the economy via GDP growth and incentives for new investment both in the industry being deregulated and industries that it services or buys from is more important. And, third, there are the impacts on local communities.

Most of the concern has been about the commercial interests of Telstra and its share price at the expense of a robust competitive envirronment in telecommunications.

Hilmer adds that:

A net assessment needs to be made of any diminution in the value of Telstra versus an increase in the wealth of the community as a whole because of the benefits that flow from the wide wide and economical access to broadband infrastructure.

We have not seen such an economic asessment. All we have heard is the decreasing value to Telstra due to what it calls a lack of regulatory certianity on acceptable terms before investing in its fibre-to-the-node network.

| Posted by Gary Sauer-Thompson at 11:27 AM | | Comments (0)
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