IT Resource

After a week of dithering, the federal Government has finally issued the documents for its single telecommunications policy: a new $9 billion plus fibre-to-the-node network.

The phoney war is over but the real one must be fought in record time. Most disturbingly, a large part the negotiations to spend $4.7 billion of taxpayer money may be conducted behind closed doors, with participants gagged.

“Except with the prior written written approval of the Commonwealth, proponent should not make any statement, issue any document or material or provide any other information for publication in any media.”

Or the “proponent” can be excluded. Thanks for that General Secretary Conroy.

Frankly, it’s looking a bit like Groundhog Day. Remember the secret Opel discussion Communications Minister Stephen Conroy rightly poured scorn on?

At the time, Telstra wasn’t too keen on it, either.

All this contributes to the growing feeling that the Government has lost sight of the big picture on telecoms and is rushing simply to tick boxes on election promises. It also suggests Labor has fallen prey to similar mistakes made by its predecessor by trying to spend its way out of the regulatory and services bottleneck that is crushing telecoms competition in Australia.

It’s worth going back 12 months or so to the release of the Labor policy. With the right idea, Kevin Rudd, Conroy and Lindsay Tanner launched their broadband plan with a firm eye to breaking the deadlock on Telstra’s fixed-line near-monopoly.

It was an attempt to address failure in public policy and the root causes of telecoms bottlenecks, and an opportunity to go back to a better regulatory framework by separating of infrastructure from retail businesses.

Yet none of this has been addressed, save a separate process on regulation, which Conroy has previously said the tender should sort out. All he has done is to continue the status quo.

On the timing front, everything is being done on the double — never an ideal speed for sound policy.

The network is a massive infrastructure project. Telstra says it is the biggest piece of infrastructure investment since the Snowy Mountains scheme, although some in the mining and energy sectors may quibble.

Negotiations suggest horse-trading and there is already talk that Telstra may sacrifice its HFC (Hybrid Fibre Coax) network, which carries Foxtel and some broadband, to get the deal. It can run pay TV and broadband on FTTN.

The problem with this is that new industry entrants don’t have anything much to trade. That, after all, is why competition policy was invented: to end Government-industry horse trading and install an independent umpire.

There are other questions about the Request for Proposal (RFP) document. For instance, this a wholesale network, so why is it talking about retail pricing? Then there’s that gag order. Democracy be damned.

There have been signs that Optus may be stirring from its long slumber, with a sharp rebuke from its often invisible chief executive Paul O’Sullivan following the RFP’s release. He decried it as a missed opportunity.

Then the Competitive Carriers Coalition moved to clarify the position of the competition regulator in the process. Only Telstra seems pleased: “Warning, Will Robinson, danger approaching.”

It is, above all, a very departmental process rather than a bold policy statement. So much for new political ideas. There is not even any context or scene setting to explain why this must be done, and done so quickly.

That is because no-one has ever identified the broadband problem much beyond rhetoric and invective.

The request also lacks any commitment by Government to transparency. In fact, almost unfettered ministerial prerogatives are written all over it.

Sure, of course the minister to should have some flexibility in spending so many taxes.

Conroy is attempting a very complex deal and the request recognises that with 18 objectives and six criteria. There is no indication of the crucial weighting each will have for success.

What if no-one comes except Telstra, which is demanding an 18 per cent after-tax return on its capital return? Blame the department again? Hand it to Telstra in the “national interest”, or try and build it as a government project and end up in a court battle with a very rich company?

Conroy has put all his eggs in one basket. On the evidence of his request he must have something up his sleeve. If he doesn’t, he will struggle to cook this omelette.