07 April 2009

Keating's Mistake to be rectified

Back when privatisation was all the rage, even for left-wingers like Paul Keating, Telstra was sold partially to investors (and boy, didn't they get a bargain!). At the same time, other telecommunications companies were permitted to compete. But there was a real flaw in this bit of economic rationalism: Telstra still owned the exchanges, the PSTN and the other infrastructural components needed, and they behaved, well, like a really big corporation that was staffed by public servants. They spent the last 13 years obstructing other companies' access to the networks, necessitating and expensive duplication of infrastructure.

What Keating should have done was to privatise the marketing and customer service parts of Telstra, and set up a government administered public company to oversee and maintain the networks, and to improve them as the customer companies needed, with the companies funding the costs. But it is still the bottleneck that ISPs and telcos face, that Telstra controls the exchanges, and you have to wait on their pleasure to get connections made (while, of course, their customers get connected immediately, but at a high cost).

This is no way to run a chook raffle, let alone our telecommunications infrastructure. Now KRudd has decided to build a new infrastructure as a government (and, we hope, recoup the costs from license fees by the telcos). It should have been done in 1996. It will cost us a lot more than it would have back then, because the Optus optic fibre rollout would have been a shared cost and not a duplication.

I bet Conroy had little to do with this sensible, albeit late on the part of Labor, decision.