Telstra Bleats About Regulation

I've often marvelled the way certain businesses laud the free market while doing their best to maintain a favourable monopoly (or cosy duopoly) position. Telstra is no exception, judging by the company chairman Donald McGauchie's whine to his shareholders about the regulatory constraints recently imposed on his company by the Senate.

'The Pigs' has always taken the stance that the sale of Telstra was flawed. It was a mistake that the company, which controls the infrastructure in addition to providing telecommunication services, was sold as an entity. Controlling the infrastructure gives the company monopoly powers, which the parliament saw fit to regulate.

It would have been far better to split the company along service and infrastructure lines. The free market would have regulated the service providers through competition, and a measure of cross subsidisation could have been used to maintain and upgrade the infrastructure in the regions.

Despite regulation, the fully privatised Telstra will do all it can to stymie competition and maintain its influence over the telecommunications network.

The privatisation of Testra is a mess of the government's own creation, brought about by it's desire to maximise the return from the sale of a monopolistic public asset. It will slow the introduction of new technology as Telstra uses its control of the existing infrastructure to maintain its market ascendancy. It will cause competitors to implement new infrastructure, itself monopolistic, to get around the obstacles Telstra creates.

A far better solution would have seen infrastructure companies that provide network access to all service providers. Unfortunately, that's now unlikely to happen.