Ep 48 of 2010
November 29, 2010
Last Friday (26/11/2010) the Senate finally passed the bill for structural separation of Telstra's wholesale and retail arms, which opens up the way for one of the Government's key election promises, the continued rollout of the national broadband network. Telstra's retail and wholesale split is a key part of the establishment of the Government's $35.7 billion National Broadband Network.
The legislation passed the Senate by 30 to 28 votes after days of protracted and angry debate with the support of the Greens and independent senators Nick Xenophon and Steve Fielding.
Ironically, the governor of the Reserve Bank Glenn Stevens appeared before a parliamentary committee and argued in favour of a cost benefit analysis of the network, something the government has been reluctant to provide on the basis of commercial interests currently awaiting comment from Australia's consumer watchdog, the ACCC.
So what does the structural separation of Telstra mean to Australians? Despite the Howard government's 1997 reforms to the Telecommunication Act, which introduced so called competition into the market such as Optus, the landscape for consumers has been grim with Telstra exploiting its monopoly as the buyer and seller of wholesale services to gouge the public and its struggling rivals.
Senator Steven Conroy says the reforms are necessary because dealing with Telstra's rip-offs is an unavoidable reality. In many cases, Telstra has been nabbed charging its flailing wholesale customers such as Dodo, and Freshtel more than it charges everyday punters for phone and internet services advertised in the paper. Some commentators have drawn parallels of competition saying it's like Woolworths owning all the farms and factories in the country.
In the past, the idea was that different retailers could access to Telstra's network at a fair price. In theory, if Telstra was uncooperative, the retailers could force Telstra's hand, resulting in costly legal fights, but little in the way of reform.
Conroy's plans would create one network company, regulated to ensure competition, as opposed to the current farce where the network is controlled exclusively by Telstra. The network, perhaps partially owned by the government, would then sell wholesale services to any number of competing retail companies. Households would be able to choose Telstra, among several other carriers, but without the conflicts of the current arrangements.
So looking at the sums, NBN Co's infrastructure plus Telstra's infrastructure equals Australia's National Broadband Network which will be 8 years in the roll out with the added advantage of Telstra no longer able to stack the pricing odds in its favor. Sounds too good to be true, but at face value, that's what we're about to have. So in Julia Gillard's vernacular, maybe we'll have to be thankful that Australia's luddites didn't win the last election, but then again, there's a long glass road ahead of us.
This week on Tech Talk Radio
- Telstra to split after almost 12 months of negotiations,
- The NBN has brought out the best in our federal politicians,
- Adam turns his attention to credit card fees for overseas transactions,
- There's plenty of online security issues this week and
- Apple release the long awaited iOS4.2 with 4.3 in the wings