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Monday, 26 March 2007 16:05

Howard's "wait and see" approach sets Australian broadband back 20 years

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Despite the deadlock with Telstra over building a high speed national broadband network, Australian Prime Minister John Howard would rather "wait and see" if someone rolls out such a network rather than accept Labor's plan of a joint venture between government and the private sector.

"Let's wait and see if they're definitely not doing it," Mr Howard told Sky News, reports IBN News. "I'm not going to go back into the business of part-owning a telecommunications company," he said. "That would take us back 20 years."

How long does he want to wait? The Howard government's complacency on broadband over the last few years already threatens to set Australia back 20 years, with the nation falling further and further behind other countries.

Labor doesn't propose the government part-own a telecommunications company, it proposes the government part-own an infrastructure company in conjunction with telecommunications companies. That fact Howard can't see the difference is part of the problem.

Telstra should have been broken into two before it was privatised - telecommunications and infrastructure - so all telecommunications providers could compete on a level playing field. The Howard government's concern over the share price meant it didn't have the guts to do what was right for the country and break Telstra in half. The nation has been paying for that mistake ever since, with Telstra using its ownership of the infrastructure to throw its weight around and hold the country to ransom until it gets its own way. While it's too late to split Telstra in half now, Labor's plan to ensure it doesn't have a monoploy over the next generation of infrastructure is the next best thing.

When Labor put forward its broadband plan last week, Howard responded with; "Why should we use $2.7 billion that's been locked up for future generations, why should we use that to fund the provision of something that the private sector ought to provide in a normal market situation."

The private sector clearly isn't providing it, but the Howard government refuses to see this. Since Labor's announcement, Communications Minister Helen Coonan has started insisting the private sector will be prepared to roll out high speed broadband internet to capital cities within three years - mostly likely Telstra.

Such news comes as a surprise to anyone who has watched Coonan and the ACCC grapple hopelessly to resolve the stand off with Telstra and its competitors as to who will build such a network. Labor's communications spokesman, Stephen Conroy, points out that - by the government's and Telstra's own admission - a capital city network could not be up and running in three years. He cites a statement by Telstra to the Australian Stock Exchange that said it would not consider building a national broadband network without "significant regulatory reform". Telstra's rivals are also waiting on reform but Coonan has said it won't come until 2009.

Howard's "wait and see" comments combined with Coonan's new found confidence in a quickly resolution to the long-standing broadband deadlock indicates they know something we don't. Even if Coonan does turn around in the next few days and pull an ace out of her sleeve, if it involves handing Telstra control over a national Fibre to the Node network then it's still bad news for Australia. It might break the "broadband drought" in the short term but it will condemn Australia to forever be at Telstra's mercy


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