http://www.theaustralian.com.au/australian-it/conroy-set-for-clash-over-nbn/story-e6frgakx-1225841689131

Another tax payer funded review not being made public. This is a very scary trend. First the Tax Review and now the NBN.

1. Cancels the Howard governments regional broadband plan that would have cost taxpayers just $958 million and given regional areas a high speed internet connection by now. Conroy will end up spending about the same amount on consultants, studies and start up costs for the NBN.

2. Comes up with fellow business genius Kevin “the bucks stops with me” Rudd (but don’t ask me about the hospitals) a plan to spend $40 billion dollars of taxpayers to build a broadband network before checking to see if it will commercially viable.

3. Hands over free spectrum to Kerry Stokes just after they spent a few days skiing together. Does that sounds like open and transparent government to anyone?

4. Recommends a “mate” (ALP member) for a $450k executive role in NBN Co. The position is not advertised and the mate has never worked in telecoms, but the mate of course gets the job.

So after more than two years in the job Conroy (and his staff & consultants) have not delivered a single broadband connection or been able to come up with a business plan that justifies the case for deploying the NBN.

What a national disgrace.

http://www.news.com.au/national/minister-in-secret-snow-dinner-with-mogul/story-e6frfkw9-1225830083475

So not only will be the NBN be late, but already the costs are blowing out.

This is a good example of why Governments should stay away projects best left to the private sector! If Telstra had undertaken this tender process it would have cost taxpayers nothing!

If it is truly about competition then let’s see the Government clearly articulate the rules by which they feel they can break up companies. (and in the process scare foreign investment out of the country)

Let’s also reflect on the attack on the private hospital/health care system as well which is in fact designed to push people into the government system….now there is a true monopoly! In fact unlike Telstra our public hospital system can kill you!

Thanks for your reply. No,I’m not a shareholder of Telstra. My gripe is solely about the tactics being played out on this issue.

What has been done should not be undone by threat, blackmail or (whatever excuse) by either a Coalition or a Labor government. I’m not into the politics of who did what, just what is currently being forced upon one of our industries. After all Qantas was sold, and their monopoly then broken down by allowing other airlines into the Australian market place.

With Telstra, a far better way would be to invite other overseas telcos into the government NBN to break Telstra’s monopoly (similar to what was done with Qantas), and not just ignore the little people who now own an ASX company together with our Future Fund. Maybe I am a little naive, but Conroy’s attitude should be deplored by all.

And, how much did it cost taxpayers with Conroy’s cancellation of the contract put in place by the previous government with (I think) Opel. There was a solution to the broadband/wireless problem and money for the bush put aside. I’ve heard nothing about this. Maybe you have?

Senator 13
Thanks. Seems you and I agree. And, you are right “bail outs” should not happen either. Sol, of course, was a disaster. Anyway, let’s hope your dream comes true because nothing we say here will make the slightest difference to what happens unless the media becomes critical too. So much for democracy!

I also agree that if the Government wants to be in the telecommunications business they should either build their own or buy back TLS. By the time this NBN debacle is finished the final cost will be getting pretty damn close to what it could pay to buy back TLS.

At the end of the day the NBN is going to be an out of date, over budget and slow network. Why be building a fixed line network when everyone is moving towards wireless.

The Government is very shady about all this. No business plan, no cost benefit analysis, no mention of who is going to take a stake in this venture, no take up projections, no estimates of what they are going to charge. Do they have a PDS – no.

I currently do not have shares in TLS. Had T3, made 50% and ran. Sol was the main reason – he had dodgy written all over him from day one. TLS have been in a long term share price decline for a very long time now. Their earnings have not been that crash hot either when you look the results over 5 years. I would expect a hell of a lot more from something that is as dominant in the market as TLS.

I just don’t like they way the Government has gone about all of this. Yes, the way it was sold originally was not the best and the way it operates currently is not the best but you can’t just have governments come in and blackmail them all because they are trying to build a dodgy network. I just don’t think it is good.

But hay, let’s hope I am wrong. In a few years Conroy with all his years in project management and telecommunications may have produced a well managed broadband network serving the bush and I could be sitting at a 100mbps connection for $30 per month. Ah, it is nice to dream…

I think this should have been done a long time ago. The Gov at the time (remember who that was…) would have been happy to rake in ~50% of profits – some of those profits a result of the monopoly Telstra had. The losers being the Australian public (although some others here disagree with that point).

I really don’t think Telstra is a precedent that can be used in other areas. Although if there is any potential for similar action it is probably with Woolworths or Wesfarmers – and I doubt that.

Question: Are you a Telstra shareholder? I am not (at least not directly).

No ASX or private company should be nationalised, even banks which Chifley threatened to nationalise years ago. Governments can’t run profitable railways or anything else for that matter, so, why should broadband be any different? I find the idea of blackmailing any company to do what a government wants APPALLING, and am amazed that there are not more people saying this, or journo’s making my point either. What is happening to this country?

If this current government really believes in its “fair go” policy, it should buy the assets back and repay shareholders, or just leave things as they are with Telstra, or start another company (either a private or public NBN) to build their broadband infrastructure and actually create genuine telco competition.

We don’t need Nationalization of any industry in this country. Such a precedent makes one wonder what could be next……

Yes Telstra can be frustrating to deal with, but so can be some of it’s competitors. Are we suggesting that the Government is free to break up enterprises with poor customer service outcomes? If so, then the public hospital system should be on the chopping block.

I am not big fan of Telstra and I do not hold shares in the company any more, but I think there is more at stake here than meets the eye. (hence my new post today)

Pete I am not 100% sure that having the Government come in and forcefully break up a publicly listed company is healthy in a free market.

But the difference is that Telstra started as a Government service, and thus controlled all the infrastructure, but was then later made private.

It is because of this starting advantage that Telstra has been able to maintain a strangle hold on things. I really despise having to use a Telstra landline in order to have ADSL at home. I don’t even use the landline phone (and yes I know there are other alternatives, but they are not better in my case).

If Telstra has to pay line-rental like every other telco, this levels up the playing field a lot.

However, you make a good point about the NBN. Personally I feel the Telstra breakup is well-overdue (they should have done it at the time it was privatised), and if it is done to maximise some benefit to the NBN scheme then that is a negative i’d be willing to wear just to never have to deal with Telstra again.

I really despise Telstra and think they are a disgusting company, with pathetic customer service. Maybe now they will have to play the same game as everyone else.

I too did wonder about the insider trading component of the Future Fund. Shares only dropped 5% though, it’s not like they dropped 50% (I know that is still a significant amount of money though).

If the Government makes Telstra split away their cable TV business for example will they make Optus do the same? Or is Optus special because it did not upset the Government?

The move by Conroy looks to me like a way for the Government to try and ram through their NBN venture and effectively remove a major competitor.

Personally the move worries me. The Government on one hand is breaking up a private sector enterprise and this will probably result in losses for Telstra shareholders, while at the same time setting up a Government monopoly to deploy and operate a National Broadband Network. Sounds like nationalisation by stealth.

I am also curious about the timing of the sale of Telstra shares by the Future Fund a couple of weeks ago. Did the managers of the fund know something?

It’s only a few decades overdue, but I think this is excellent news.

The company I hate the most is finally getting broken up as it should have been when it was privatised.

Shame it is one of only a few good things to come from the Rudd Government since the election.

In addition the take up rate is very low..so far around 17% but what does the Tasmanian Premier think about that? According to the report in The Australia he reckons “it doesn’t matter”

Isn’t it great to hand billions over to people who think it isn’t important for a public enterprise to make money!?!

Rudd flouts rules with market play

Yes we need an improved IP/Internet services in Australia, but the NBN proposal we have now is not the way to achieve the best outcome for Australia.

So now to cover the fact that Conroy has bungled yet another assignment we are going to spend billions on a network that will be motivated more by politics than necessity. This is the worst possible outcome for Australia.

I wonder what Rudd’s next move will be? Perhaps he will create a government owned supermarket if he does not see food prices fall?