If you read a major newspaper on Tuesday, the chances are that you came across a full page ad from Telstra asking “So why is the ACCC still allowed to say ‘NO’?”. If you happened to miss it, a copy can be viewed here.

In the full page ads Telstra outlines its “broadband plan for Australia“, indicates that the only obstacle in their way is the ACCC and encourages the reader to “Tell the ACCC today to stop saying ‘NO’ to high-speed broadband.”. What is interesting, although perhaps not surprising, is that price is not mentioned at all and no explanation is given of why the ACCC is saying ‘NO’.

Judging by the following excerpt from Tuesday night’s 7:30 Report on the ABC, it appears as though Telstra hasn’t actually outlined to the ACCC what price they would like to charge for the service. It seems pretty tough to ask the ACCC to make a ruling on whether Telstra’s proposal is fair for the Australian consumer when such a critical piece of information has not even been tabled.

GRAEME SAMUEL, ACCC CHAIRMAN: I would simply ask one question of Telstra: what price? And it’s the question we’ve been asking all the time. Telstra, tell us, tell 20 million Australians what price it is that you’re proposing to charge for broadband and then let us, as the watchdog of the Australian consumer, let us assess whether that price provides a fair return to Telstra, a fair return to Telstra’s competitors, and above all, a fair price for Australian consumers.

PHIL BURGESS, TELSTRA GROUP MANAGING DIRECTOR: We have given the prices to the Government, and that’s who we’re negotiating with. If the ACCC wants to know the prices, they will know them as soon as the Government agrees to the plan. If the Government doesn’t agree to the plan, if they decide the plan is not good for Australia, we understand that, they have the … number one, they have the power to make that decision, they have the right to make that decision.

Full transcript available here.

The average monthly price Telstra is proposing has been speculated in the media as around $85 per month which would push the retail price well into three figures per month. When there is an offer from another consortium to build a network with access prices around half of what Telstra is requesting you can certainly understand why Mr Samuel would like to have those details before making a decision.

What I found most alarming about the comments on the 7:30 Report though was Telstra’s apparent insistence that it is the Government that they have to make a deal with, not the ACCC. The ACCC is the watchdog for the Australian consumer. If Telstra were confident that the network and access price they are proposing is in the best interests of the Australian consumer, I can’t see why Telstra would be so reluctant to let the ACCC fulfil their responsibilities to the Australian consumer.

Telstra knows that our Communications Minister Helen Coonan is under pressure to trump Labor’s broadband plan prior to the election and Telstra will extract as much mileage as possible (in the form of pricing it appears) to capitalise on that. Telstra made it quite clear in their ad that they are capable of enabling ADSL2+ (speeds of up to 20Mbps) to 100 outer metropolitan and regional exchanges within 14 days. Why are these exchanges not enabled now? What does ADSL2+ have to do with the debate surrounding building a new broadband network? Surely Telstra aren’t withholding this higher speed broadband from Australia that they are already capable of delivering simply as a bargaining chip in their negotiations with the Government?

What I fear most about this debate is that a decision will be made based on political grounds and what is best for the Government (or what is most likely to keep them in Government) rather than what is truly best for Australia. Higher prices, less competition and therefore less innovation is not best for Australia and I sincerely hope that our Communications Minister Helen Coonan shares that view.

Posted by Ryan Bunter

This entry was posted on Thursday, May 17th, 2007 at 11:14 am and is filed under T4. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.