Government may side with Telstra

I think the title of this SMH article by Matt O’Sullican is rather misleading.

Our government doesn’t, and should NOT side with anyone.

Our government should be simply doing exactly why they have jobs in the first place, to make the decisions that govern this country, and the priority behind those decisions being for the good of the nation, and not the good of shareholders, or any other lame excuse you want to think of.

Another journalist with a few less marks beside his name from me, for writing a trashy title.

The article I’m talking of goes into a bit of detail on how Telstra’s rivals very well could be forced to pay more for the USO obligation they already fund.

Right now, I want to interupt all thoughts on that specific USO issue, and point out, the T4 (Tell The Truth Telstra) website, has an article on it, which asks Telstra a lot of questions, but one, would they agree to a independant review from a few independant people on the costs of the USO, and provide backing evidence to support those cost claims?

When you speak of cost, you are speaking of the cost to the company, and not the profits a company should make, otherwise, the other companies should not be paying it at all, if it is a for profit service.

I seriously doubt they will ever agree to allow any one to voluntarily review their claims, in fact, I doubt they can prove them themselves. The level of detail required would consist of how much copper wire was used, any other parts needed to perform each and every specific USO job, and what the tech costed to do the job, and any other equipment required, and costs, with the exception of internal costs (time spent confusing paperwork and cleaning up the trash), as that’s something Telstra themselves can control, but don’t seem to do well enough. The industry shouldn’t have to pay for bad cost management.

Anyway, the article is detailing that Helen Coonan is committed to reviewing the USO, after the election of course, so the Telstra shareholders keep her in, and that a new funding model could be implemented.

The only support Telstra has, despite what the article claims, is that, if Telstra truly do believe and can demonstrate that the USO is running at a cost to them, and the costs aren’t being recovered, it is something that truly does need to be looked into.

Helen Coonan has stated that herself in response to Telstra’s threats to neglect the bush as leverage in its ACCC and Government broadband war (like they really have put much money into Regional areas as it is!).

I totally agree however, if Telstra can demonstrate, that the actual costs to the company (aside from the wasted time with staff and paperwork, etc, they raise against themselves), should indeed be covered. Only to the extent they can reasonably demonstrate however, and the areas defined as Regional are areas where they provide services, and those services are immediately expected to run at a loss, and in the course of normal operation, still maintain a loss.

Telstra on the other hand, could get smarter, and start changing the customers over to Fibre, instead of copper, and see less faults, and therefore save money on the USO altogether.

Maybe their lack of spending of money (18% of lines have faults), should be looked at in the USO. Afterall, some of the USO lines have to be included in that 18%, surely? If that’s the case, Telstra do owe the industry some big dollars for misappropriation of the funds, which is likely to have been occuring in what can be seen as nothing short of poor management by previous Telstra management, and that’s likely continuing into current.

A better USO model would be one that doesn’t involve Telstra at all, instead, one administered by the government to ensure that at least the funding is correct, and is monitored.

Telstra raise the bill for services with the government (who should ALREADY have an idea of the costs behind services), and the Government decides if they are going to USO it or not.

Industry members are sent bills from the government showing the total cost of maintaining services, and their contribution required, and that is how you could manage USO in a manner not subject to poor cost management. Telstra would still need to provide actual costings for providing the service and demonstrate the loss, otherwise they’d still pull figures out of nowhere, like Bigpond pulled 8Mbit ADSL out of nowhere, even before Telstra Wholesale had it, they are truly some magical people in Bigpond! They predict future service offerings, and retail them before the wholesaler can!

Let’s hope that the USO funding and costing models are decided in what should be considered fair, that is Telstra aren’t left out of pocket, and the industry themselves are not being ripped out for Telstra’s own inflated, poor managed costs.

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