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Telstra jibbing on Australian consumers: ACCC -

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Telstra jibbing on Australian consumers: ACCC

Broadcast: 15/05/2007

Reporter: Greg Hoy

A simmering row over the future of the Australian broadband network erupted today as Telstra
accused the ACCC of obstructing its plans to build a high-speed broadband network.


KERRY O'BRIEN: The simmering row over the future of Australia's broadband network erupted today as
Telstra launched a stinging attack on the Australian Competition and Consumer Commission, after
recently describing the Federal Government's attitude to broadband as "complacent".

Accusing the ACCC of obstructing its plans to build a high-speed broadband network, Telstra
threatened to take the $4 billion set aside for the project, and invest it overseas.

But the response from ACCC chairman Graeme Samuel was equally vigorous, accusing Telstra of
"jibbing on Australian consumers".

The verbal stoush also flushed out the Government and the Labor Opposition, both conscious of
broadband's status as an election issue.

Greg Hoy reports.

SOL TRUJILLO, TELSTRA CHIEF EXECUTIVE: We're at, what I would call, a watershed moment here for
Australia. Countries around the world have already enacted policies to move to this
broadband-enabled world.

GREG HOY: Australia dreaming. While other advanced nations are busy building expensive optical
fiber information superhighways, Australia is still languishes in a bare-knuckle brawl over who
should build ours and what price they should be allowed to charge. Telstra upped its anti-ACCC
campaign in all of today's major metropolitan newspapers, triggering a media melee.

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.

GREG HOY: Curiously, the Government for its part seemed mildly critical of Telstra's starts.

HELEN COONAN, FEDERAL COMMUNICATIONS MINISTER: Telstra is entitled to run whatever campaigns they
see fit, and it has been very clear that they do intend to run campaigns on all different levels.
But let me say that it won't have any material difference to the outcome that the Government
considers as appropriate here, which is to encourage the build of a new fiber to the node network.

GREG HOY: Telstra meantime, was heaping praise on the Labor Party broadband platform, which calls
for open tenders and a Government contribution of half of a $9 billion construction, to deliver a
new fiber optic network.

Australians getting access to this super fast broadband, not just the Government's current
negotiations, which are about five capital cities. I mean, let's be clear. What the Government are
negotiating with Telstra is not a national fiber network, it's about delivering to five capital
cities. That's all.

PHIL BURGESS: The important thing about the Labor proposal is this: when Labor talks about
broadband, they talk about jobs, growth, economic development, urban-rural parity, exports,
productivity growth, all the things that are important. When the regulator talks about broadband,
they talk about regulations.

GREG HOY: Australia's largest telco is hedging its bets, and some smell a deal. Both the Labor
Party and the ACCC suspect the real Telstra agenda. Maybe to try to pressure the Government into
pre-empting the Labor broadband plan by attempting to strike a deal that circumvents the ACCC. So,
broadband construction begins before the election, before the project is put out to tender. For the
Government, this would deprive Labor of another of its plum platforms.

PHIL BURGESS: Well, we've had very positive discussions with the Government. The problem has been,
once again, when the Government goes to the ACCC, they find the same kinds of intransigencies that
we do. And so ... so, they need to work that out. That's not a problem for us, it's a problem for

GRAEME SAMUE: I think it's in your face, it's a very clear process that they are endeavouring the
sideline the ACCC in to do some sort of a deal in secret behind closed doors.

GREG HOY: But if today's comments are any guide, the big telco's strategy may well just pay off.

HELEN COONAN: The arrangements or the ultimate framework for it will probably be sorted out well
before the election.

STEPHEN CONROY: It's not Helen Coonan's job to decide the prices that are going to be set in the
telecommunications industry. That's why we have a regulator, that's why we have an independent

HELEN COONAN: Well, I don't think I'd call it "circumventing" the ACCC, I think it would more
characterise it as accommodating the kind of adjustments that might be needed to enable a new very
risky bill that's going to cost in the order of $4 billion. And if the current regulatory regime
can't yield that outcome, well then I would look at what might be required.

PHIL BURGESS: As soon as we have agreement with the Government on all aspects, and we have
agreement on most of them right now. But as soon as they can work their way through their
relationship with the ACCC, as soon as they can decide whether they're going to rein in the ACCC
and have the ACCC follow the policies of the Government, as soon as that happens, we'll put all of
our prices on the table.

GREG HOY: The conspiracy theory may just explain why all the formidable missiles unleashed by
Telstra today were targeted mostly at the regulator, rather than the Government.

PHIL BURGESS: So, what we're asking the Government to do is to rein in a rogue regulator or put it
another way, we're asking elected leaders to take back the control over public policy and not let
the telecommunications future of this country be determined by the unelected bureaucrats at the

GRAEME SAMUEL: I'll leave aside sort of any discussion about expressions of "rogue regulator", I
think have also been described by Dr Burgess as a "car bomber". Those sorts of descriptions have no
impact at all. In terms of accountability there is no organisation that is more accountable to the
Australian public than the ACCC.

GREG HOY: Telstra's aim is to clearly convince the public that it's the regulator who is at fault.
The Opposition believes the Government needs to strongly come to Graeme Samuel's defence, which the
Government says it is, while hinting it may need to bend to Telstra's demands on pricing for faster
broadband. And a public campaign by Telstra, might just convince the electorate of the need for an
imminent compromise.

HELEN COONAN: But I think there are some reasonable requirements and I think arrangements can be
made to accommodate reasonable requirements.

STEPHEN CONROY: The Government has got its own political interests in trying to find a plan, it has
no plan. It's desperate to do any deal it can get, and what we need to see is an open and
transparent process, not a quick fix designed to give John Howard and Helen Coonan the sort of
pretence of a plan in the lead up to an election.

GREG HOY: And there was a clear warning for the Australian public today that Telstra will take its
money elsewhere if it can't get a desirable deal.

PHIL BURGESS: There are lots of places to invest where your shareholders savings can be ... can earn
a commercial return.

GRAEME SAMUEL: All I'll do is indicate that whatever proposal comes before the ACCC has to satisfy
a fundamental criteria of being reasonable - reasonable in the interests of Telstra's shareholder,
reasonable in the interests of Telstra's competitors and fundamentally reasonable in the interests
of 20 million Australians.

KERRY O'BRIEN: Greg Hoy with that report.