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Friday, 19 March 2010 15:17

Telstra issues NBN update: Competitors brand it an "extortion note"

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An update on its NBN negotiations with the Government, issued by Telstra, has produced a stinging response from the Competitive Carriers Coalition, which has branded it "little more than an extortion note to the Government."

Ostensibly Telstra issued the note in a bid to dampen speculation in the media as the status of these negotiations, saying "There have been a number of recent media articles speculating on the status of Telstra's negotiations in relation to the National Broadband Network (NBN)," but CCC sees the timing as relating the Government's failure to get the reform legislation through Parliament.

"One day after having succeeded in stopping these laws passing the Senate, Telstra now reveals that it wants a special payment from taxpayers to get out of the way of decent reforms," CCC says.

Telstra says the negotiations are "focussed on the future of Telstra's fixed local access network and associated matters," and are continuing. However, "there is a significant gap between Telstra and NBN Co on what each party considers to be an acceptable financial outcome and there are also a range of commercial matters that are yet to be agreed."

According to the CCC, this translates into "a demand that taxpayers bail [Telstra] out of the hole it has dug for itself, presumably to the tune of billions of dollars."

Telstra says it is "discussing ways in which the gap can be bridged, recognising that the Government has highlighted the national interest benefits of the NBN and reform of the telecommunications industry'¦[However] a range of legislative changes and regulatory approvals will be needed for an agreement to be implemented."

According to CCC, this means: "NBN Co has refused to pay an inflated price for Telstra's assets, so Telstra has declared it is going to continue to frustrate good policy unless it is paid-off by taxpayers."

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CCC also directs its wrath and derision at Opposition senators who frustrated the Government's attempts to get the legislation passed.  "Senators who believed Telstra's claims last week that negotiations were serious and on-going, and that reforms to support consumers and competition should be stalled in the meantime, should today hang their heads in shame.

"Telstra has made them look like laughing stocks by revealing the truth the day after Parliament adjourned. Such senators have learnt a lesson that competitors long ago learnt - there is no such thing as a negotiation with Telstra."

Telstra's actions, the CCC says show that "Telstra holds a gun to the head of Australians." However, it speculates that this gun may not be loaded.

"Clearly, Telstra's bargaining position with the NBN Co is weak or else it would not be demanding taxpayer handouts. If this is reflected in the implementation study, taxpayers, senators and Telstra shareholders deserve to know it'¦It is time for the Government to expose Telstra's contempt for the public and the Parliament by releasing the implementation study into the NBN immediately."

Telstra, meanwhile, says it "remains engaged with the Government and NBN Co to achieve a timely outcome that is in the interests of the company and its investors'¦Should an in-principle agreement be reached and the Telstra board recommends a significant change to the nature or scale of Telstra's activities, then subject to the required regulatory approvals, the board intends to seek shareholder approval for the full proposal.

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