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News Response :: Protection racket is bad policy

Before I start, I respect other peoples rights to have opinions, it's part of living in a democracy.

Today I read an opinion article written by a Senior Columnist with The Age, you can find it yourself at - http://www.theage.com.au/opinion/protection-racket-is-bad-policy-20090920-fwob.html

The article basically claims that the Australian government runs a protection racket for the other telco companies against Telstra. The ACCC has a long history of setting Telstra wholesale prices at levels which Telstra has claimed time and time again are unsustainable. However Telstra is still here today, and their profit statements show they aren't doing too badly either.

I'm gonna grab a few paragraphs from this article and debunk a couple of myths that the article seems to be spreading

The competitors are basically marketing and billing organisations.

Early on it's claimed that competitor companies, such as Primus, Optus, etc are nothing more than marketing and billing organisations. For starters this is a gross exaggeration at the lack of overhead work that these telco providers do. They provide all sorts of other services, the quality and level of these service depend on the specific provider. Just one example of this is TPG providing IPTV services, or voip services. Both things that Telstra doesn't provide to the average customer.

Each ISP also has a significant backend network, each of which is configured in a different way depending on the target audience. To claim that all these ISP's do is outsource to overseas call centers (which the article claims later) is a HUGE understatement of what these companies do. In fact many of them run local helpdesks, and employ many local technicians. Alot of them are even locally owned.

Big institutions such as hospitals, universities, utilities, big corporations, government departments and even schools already have access to direct fibre connections.

That certainly is not true. Many of the above institutions still operate on satellite services (and no, not just in remote areas) and DSL/Microwave services. Even then, many of these connections are not with Telstra, but with other ISPs.

In Devonport and Hobart, where the Tasmanian Government has been experimenting with building fibre to the home at Commonwealth expense, shows nobody wants it while the cheaper copper alternative is available.

Something many people sadly are forgetting or don't know about Fibre is the possibility for huge advancements in media. The amount of bandwidth a FTTH connection could provide could be used for all sorts of things. It could provide access to all sorts of media, including opening the door for community TV stations to start up. With the reduced cost of being able to broadcast your media across a Fibre channel as opposed to getting your own transmission tower up doors would open all over the place.

The governments FTTH project is expensive, and it is a gamble, but to say it is not and probably never will be required is nonsense. It would pave the way for technologies which we haven't even thought up yet. It would lead to more balanced services around the country as opposed to only being able to get fast internet if you happen to have a good enough phone line.

Copper wires, properly maintained, can give speeds up to 50 megabits, which is more than adequate for any need a household might conceivably imagine.

Very true. The fact is, our copper network is not properly maintained, and the technology for 50mbps over copper probably will never make it to Australias current copper network because of this. Today 50mbps is more than fast enough for a home users internet connection. But the fact is this doesn't exist in Australia. The fastest you can hope to get is 22mbps. And that's if you are lucky enough to be just around the corner from a major exchange, in a new building, where Telstra has recently laid new cable.

Too bad if you're a mate of mine who was recently left without internet because a cow chewed through his "properly maintained" copper wire from Telstra. It wasn't even buried. It was strung across the top of a fence.

I could go on but most people stopped reading a while back. The fact is Telstra is still making money, despite foul play cries for the past few years about product pricing on ULL and other such things. They still aren't maintaining the copper network out in the bush. We haven't heard anything in months about the so called FTTN project that was going to save us all.

My advice to you Kenneth Davidson is to take a closer look at the situation. And think about it. If the prices really are that unfair for Telstra, how are they still making money? How can they justify charging their retail customers what they do when their competitors charge SO much less and at much fairer terms? Why are their plans so much more expensive than others around the world? And why not separate Telstra?

Why not have a Retail and a Wholesale Telstra. Put everyone on the same footing.

Better deal for us Australians, better deal for those in the bush, and better deal for emerging ISPs.