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Cabinet will discuss broadband services and regulation.

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Tuesday 5 June 2007

Cabinet will discuss broadband services and regulation


TONY EASTLEY: The Federal Cabinet will today discuss what plans it will take on broadband into the next election. 


It's understood the Communications Minister, Helen Coonan, will recommend that a panel of experts be set up to develop a framework for faster internet speeds across the country. 


As well, the plan will see more public funds go to broadband services in regional and rural Australia, as well as a commitment to change the way the industry is regulated. 


Emma Alberici reports. 


EMMA ALBERICI: The Australian Competition and Consumer Commission now has two concrete proposals on the table that would give the country access to broadband speeds up to 100 times faster than is currently available. 


The problem is that both plans, from Telstra and its rival G9, led by Optus, rely significantly on regulatory reform. 


Telstra wants to cut the ACCC out of the process entirely, allowing it to charge its retail competitors whatever it wants to for accessing its infrastructure. Not surprisingly the Government won't have a bar of that. 


Communications Minister, Senator Helen Coonan, won't discuss the options she'll be taking to Cabinet today. 


Her equal number on the Labor side, on the other hand, was happy to promote his broadband policy, which involves setting up a separate telecommunications network half funded from money taken from the Future Fund and half from private sector funds. 


STEPHEN CONROY: Helen Coonan and John Howard, up until today, have refused point blank to accept this argument. They've maintained the argument that the existing framework can solve any problems. Labor's said consistently as part of our plan we accept the need for regulatory change.  


We're going to sit down in an open, public tender process, as part of Kevin Rudd's plan, and discuss the need and what needs to be changed in a regulatory sense. 


EMMA ALBERICI: Telstra wants to sideline the ACCC entirely. Is that something you will support? 


STEPHEN CONROY: Not at all. The ACCC has an invaluable role here to ensure the national interest is being looked after. That's why it's been so disappointing Helen Coonan's been meeting without the ACCC, with Telstra, behind closed doors. 


EMMA ALBERICI: In effect, Labor's plan admits that Telstra can't remain both a wholesale and a retail company. 


Opposition Telecommunications Spokesman Stephen Conroy again. 


STEPHEN CONROY: Well after 11 years of doing nothing, with just four months to go before a federal election, John Howard is setting up a committee. This is in response to Kevin Rudd announcing a plan to deliver true broadband for 98 per cent of Australians at speeds 40 times faster than Australians are getting now. 


EMMA ALBERICI: So does this necessarily require Telstra to give up its infrastructure monopoly? 


STEPHEN CONROY: Well Labor's plan would be to create a PPP (public, private partnership) which would deliver equity from the government, along with whoever won the public tender, to create a structure that would go forward and run the network. Labor's plan will guarantee open access for all players. This would ensure no company, whether it be Optus or Telstra, was able to create a monopoly into the future. 


EMMA ALBERICI: Independent telecommunications expert, Paul Budde. 


PAUL BUDDE: You cannot invest any money, not Telstra, not Optus, no nobody, nor can you spend any, any government funding, if you haven't sorted out the maths regarding regulation. 


EMMA ALBERICI: Does it necessarily mean we will need structural separation of Telstra? 


PAUL BUDDE: Eventually it's unavoidable. We now see at least half a dozen to a dozen countries around the world moving into that direction. It makes a hell of a lot of sense and therefore eventually it will happen. 


Now, already even Sol Trujillo has talked about private equity and possibilities and things like that. Macquarie Bank has been rumoured to be interested in things like that. So, also things are happening, sniffing around Telstra. So eventually something like that needs to happen. 


Now, I prefer a, a move by, led by Telstra, you know, to look after its own destiny. But if Telstra is not looking after its own destiny, then it will either be the regulator or it will be private equity companies that actually start assisting Telstra making that sort of decision. 


TONY EASTLEY: Paul Budde, telecommunications analyst, ending Emma Alberici's report.