Why Telstra's $18 Million Fine Is An Election Issue

The dominant technology issue of the election so far has been internet filtering. However, an $18 million fine imposed on Telstra is a reminder that Labor and Liberal parties both have very different views of the telecommunications industry, particularly on whether we need the National Broadband Network.

Telstra's court-imposed $18 million fine, following a court case bought by the ACCC, is because it refused to allow competitors in four capital cities to install equipment in exchanges, claiming those exchanges were full when in fact they weren't. In rather plainer terms: It lied in order to prevent competitors setting up rival services, and it was able to do so because, as privatised under a Liberal government, it retained control over network equipment.

Under the Labor plans for the NBN, Telstra will effectively sell off the existing network to the NBN, removing its role in determining exchange access and competing with other ISPs to purchase NBN access at wholesale rates. However, Liberal policy is to ditch the NBN altogether and retain the role of the ACCC in determining access disputes to the existing copper network.

An $18 million fine might suggest that the ACCC is doing an OK job of that, but it's crucial to note that the anti-competitive behaviour began in 2006. In other words, it has taken five years for the issue to actually get resolved. At the rate of current network evolution, five years is a long time, and relying on that process is a terrible way to run a business. Whether you think it's a terrible communications policy is up to you, but it's something to consider when weighing your decision.

ACCC


Comments

    So I'm not sure what you're advocating here. Put in place an NBN that removes all possibility of wholesale competition because it took a while for the regulator to finalise action against the current monopoly wholesaler?

    With Telstra sold in to the NBN it becomes an even more unresponsive monopoly than Telstra was. Say the NBN locks in deals with several retailers, there's tremendous pressure for it to exclude a new retailer able to undercut the existing cabal as that would reduce per MB returns.

    Instead, how about promoting an NBN that promotes both wholesale and retail competition. Selling Telstra in just removes all potential for lowering wholesale prices.

      The point is that Telstra's (in)action was a result of it being both wholesaler and retailer.

      As a wholesaler only and with $43Bn to recoup I'm sure there'll be plenty of pressure on the NBN to get as many retailers on board as it possibly can.

    As expensive as the NBN is, we need an alternative to Telstra. If you are outside the Major Cities like me, Telstra is often the only option of you want any sort of decent speed. Hopefully the NBN will change all this.

    > Telstra will effectively sell off the existing network to the NBN

    My understanding is that Telstra is simply leasing space in exchanges and ducting to the NBN, but would retain ownership of the assets. Potentially this includes the ability to also rent space to other people.

    I guess $11 billion isn't enough to buy the actual assets. I would have hoped for that amount of money the government would have actually brought something tangible.

    I qant to know who divvies up the eighteen million?

    Remember it was the Liberal plan to retain the assets paid for with public funds and sell off Telstra as a retailer with equal access to those resources alongside any other company, ensuring income into the public purse from these companies wishing to use the public network. This plan was ruined by the Democrats who forced the new Telstra to also own the public assets. The public backlash against this was to basically wipe the Democrats from parliament - the sitting members either joined the Labor Party or were not re-elected.

    When you want to consider this issue for the upcoming election, remember that the people that ruined it are part of the Labor Party.

    It was the Liberals who caused this mess by selling off Telstra in the first place.
    The NBN I believe is the ONLY tech issue worth considering this election, and the Liberals scrapping it is the most stupid move ever!
    The NBN is the most important infrastructure project since phone and electricity, and a political party who can't see this should not be in government.
    The filter will die a slow death hopefully, so it won't be an issue with any luck. The assumption is that the liberals won't try a filter, but I'm no so sure.

Join the discussion!

Trending Stories Right Now