Telstra internal memo
Thu, 27 Mar 1997 21:54:45 +1000
For the information of linkers. Journos can use it after Tuesday's
Australian hits the street.
Telstra is delighted with the new Telecommunications Bills, according to a
two-page confidential internal memo circulated by Graeme Ward, the Group
Director of Telstra's Regulatory and External Affairs division.
The memo, sent to about thirty senior executives on Wednesday, boasts that
the package of legislation passed through Parliament last week "puts
Telstra ahead in terms of incumbent carriers around the world".
According to the memo, the most important provisions of the new legislation
from the company's viewpoint are that Telstra is now permitted to counter
any local competition by charging different call-rates in different parts
of the country. They have also avoided a requirement to 'file' their
The first provision means that the carrier can set different prices
wherever it wants, effectively allowing it to match or undercut prices
posed by any local or regional competitive threat rather than base them on
the real cost of service provision. Local call prices in Adelaide can be
lower than elsewhere in Australia, for instance, if a competitor is
offering cheaper calls just in Adelaide.
The lack of mandatory filing of public tariffs means that Australian
corporation and potential competitors will never know what rates are being
charged to other businesses. Each will need to negotiate for access- or
service-prices independently, and each will be in the dark about the
tariffs negotiated by others.
Other "positive outcomes" which Ward lists in the memo as Telstra gains are:
* Permission to charge on a timed basis for business data calls. [This can
now be made mandatory, for both data and fax.]
* The company no longer needs to provide free Directory Assistance.
* The old network boundary point (the demarcation point) is retained for
[This means that Telstra retains total control of the rented street access
lines, and so customers must first strike a deal with Telstra before
gaining access to its competitors.]
* Special powers and immunities for stringing street coaxial cable are
preserved until September 1997.
[This gives them a three month extension to catch up to Optus in
* Tariffs may be changed, or new tariffs introduced, with only seven days
notice. And the ACCC may make these public only "if it is satisfied it
would be in the public interest".
* The requirement to provide a digital data capability (comparable to an
ISDN channel) across Australia by 2000, is "subject to a review".
The re-introduction of time-charging was seen by business users, ISPs. and
Senators as a direct breach of an agreement made with the Government that
the original legislation would be amended.
This promise was hurriedly broken by the Liberals when they perceived that
Sen. Mal Colston had temporarily survived in the Senate giving them the
balance of power. So they pushed through the original legislation without
the promised amendment.
As a postscript: The Minister for Communications, Senator Richard Alston
finally blocked Telstra's idea of charging Internet Service Providers for
the receipt of calls on a timed basis. Telstra's plan to introduce B-party
(receiver) timed calls as an alternative to A-party (originator) time
charging, was widely known but never publicly admitted.
The proposal had been leaked to the press and minuted in Hansard, but it
was still hotly denied by the Liberals until Wednesday. Senator Kay
Patterson, chairman of the Senate Inquiry, fiercely attacked ISPs and
journalists, deploring what she called the "deliberate campaign of
misinformation" on the matter.
However, in a statement released in Canberra on Wednesday, Senator Alston
has now unequivocally promised that he will not allow Telstra to introduce
this proposed new form of Receive-only tariff.
"The Government believes that such a charge would create unacceptable
burdens for the ISP," he says. "Any attempt to imposed a B-party charging
regime will be prevented." With A-party time-charging now enshrined in
legislation, this is now unnecessary anyway!
Meanwhile, Telstra is celebrating its wins: "With the shape of market
conduct rules, tariffing requirements, and access rules now determined,"
says Ward in the memo, "it is expected that there will be some further
honing of financial and business strategies to take up on the opportunities
presented by a more open competitive regime."
Technical writer and journalist.
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