Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here’s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Alston must face up to his 'con job' over the Telstra monopoly

By Paul Budde - posted Thursday, 26 June 2003


Richard Alston, already notorious for his broadcasting and telecommunications policies, has carried out yet another con job.

The Foxtel/Optus content-sharing deal that was clinched in November 2002 contained elements over which the Australian Competition and Consumer Commission was powerless.

According to ACCC chairman Allan Fels, he was only able to look at the deal in the context of pay TV and had no authority to link that to the broader telecommunications or media environment in Australia.

Advertisement

The deal provided Telstra with a level of market dominance that is unique in the Western world. As well as this, it enabled the company to maintain a strong valuation, which would be beneficial for the privatisation of Telstra.

But it didn't stop there. In an endeavour to be seen as looking after the broader national interests, the minister recently made the following comments: "Clearly these [Foxtel/Optus] arrangements require consideration by the ACCC under the Trade Practices Act, and the government will also seek formal advice from the ACCC concerning the extent to which emerging market structures are likely to affect competition across the communications sector, including through the provision of bundled Pay TV, telephony and broadband services. The government is keen to ensure access to content on non-discriminatory terms."

The ACCC recommended that to solve the problem of market dominance by Telstra the company should divest its interest in Foxtel. In the lead-up to this announcement it had already become clear that this was the only recommendation that the ACCC could possibly make; everybody in the industry was aware of Telstra's dominance in the market, but everybody was also well aware that the minister had no intention of implementing that recommendation.

Just like the structural separation inquiry, this has been a con job from beginning to end.

I have supported the minister on the two key issues, as he sees them, in his regulatory policy:

  • Stimulate facilities-based competition (building their own network, for example Optus).
  • Open up the existing Telstra network.
Advertisement

The Foxtel/Optus merger is limiting facilities-based competition and the ACCC recommended that Telstra should divest its interest in Foxtel in order to increase competition. Yet, having been given a chance to address the issue, the minister rejected the ACCC recommendation.

Digital TV could be used as a platform for competition and, even more importantly, so could cable TV. Every other comparable country in the world is using the telco and cable TV platforms for facilities-based competition. Alston's latest refusal to establish this level of competition in Australia puts his handling of the issue in question.

If these two platforms (Telstra's phone network and Foxtel's cable network) are not used to establish facilities-based competition, what else is there? There is little hope of fresh investments being made and, with the collapse of several networks (for example, Nextgen) and problems being encountered with companies like PowerTel, there's little chance that there will be any facilities-based competition without regulatory intervention.

  1. Pages:
  2. Page 1
  3. 2
  4. All

This article was first published in The Australian Financial Review on 25 June 2003.



Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Paul Budde derives income from consulting to the telcommunications industry as in independent adviser. He has no shareholdings in the sector.

Other articles by this Author

All articles by Paul Budde
Related Links
Australian Competition and Consumer Commission
Department of Communications, Information Technology and the Arts
Paul Budde Communications
Senator Alston's home page
Telstra
Photo of Paul Budde
Article Tools
Comment Comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy