[LINK] Alston Warning re ALP statements on Telstra

[Michael Skeggs]

Hi Bernard, Linkers,
I'll have a go responding to the Facts: 
Fact 1, that the Universal Service Obligation requires adequate telephony
access everywhere.
This is true, and in the past great sums have been spent to deliver voice
calls via radio repeater (can't remember the acronym) and satelitte to
places in *really* remote locations. These customers then paid standard line
rental and call charges, although they obviously wouldn't have 4 million
people in the local call zone like in Sydney.
I believe the USO was extended a year or so ago to include 64kbps data
transmission, presumably to be charged at dial ISDN rates. I recall Telstra
doing an advert at the time with someone sending video (?) from some outback
location.
The trouble with the USO is that it is now a competitive contract, and last
time it was tendered Optus had a fair go at winning it (if industry talk was
to be believed). This tends to indicate that the government is paying at
least a fair price in subsidy to Telstra for this service, and is likely
paying a bit over the odds.
Even with a reasonably lucrative remuneration, I can foresee a time when the
USO would fail. Even with reasonable payment, running all these outback
sites is very difficult, and risky. A year of bad storms in the gulf might
blow your profit, especially if you had to restore service in a short time
frame, as specified in the consumer guarantee.
So I suspect in time the USO will become a contract nobody wants to bid for,
and the government of the day will have to invoke what legislative powers it
has to presumably cancel the telco licence of operators refusing to provide
a USO offering. 
If this happens, expect the overall cost of the USO to increase markedly.

The alternative to all this is to privately develop infrastructure to bypass
the meagre offerings currently available outside the capitals. The trouble
is the economics are marginal and the co-ordination involved is extremely
difficult. Ask the Uni of Wollongong and the south coast shire councils...

Fact 2: The CSG sets in law the timeframe in which carriers must provide
new services and repair faults to existing services or pay compensation.

This is true, too, up to a point. What is not mentioned is that having
penalties does not make the phone work. I can only assume, based on
anecdotal evidence that Telstra and Optus have discovered the most efficient
workforce staffing policy is n-1 the number of staff needed to deal with
faults in a timely manner. This makes sense, as if you presume an engineer
can fix five or six faults a day, then the penalties from that many out of
order phones will be less than the engineers wage plus on-costs.
On average, it appears fixes are made in a reasonable time frame (a day or
two), but this just in time style workforce doesn't cut it when major storms
or similar pile up the workload.
The real crime is that if I am a business customer with a mission critical
phone service (think a taxi company, or dominos pizza, or St Vincents
transplant unit) I can't get a guaranteed time to repair from anyone. The
penalty payments are academic when your business is out of action due to a
back hoe cutting some fibre or similar.
So, yes the CSG does provide an incentive to fix problems promptly, but nt a
very strong one.

Regards,
Michael Skeggs

-----Original Message-----
From: Bernard Robertson-Dunn
To: Link
Sent: 05/09/01 04:18
Subject: [LINK] Alston Warning re ALP statements on Telstra

<brd>
Can anyone comment about Facts 1 and 2 under the current Government?
</brd>

Media Release
Communications Minister Richard Alston
http://www.dcita.gov.au/cgi-bin/trap.pl?path=6027

Warning 

Regional communities should be on the lookout for false and misleading
statements by the Labor Party about Telstra.

The truth is that services are guaranteed by law under the Universal
Service Obligation (USO), Customer Service Guarantee (CSG) and price
caps
legislation, regardless of the ownership of Telstra.

So don't believe Labor when they claim that any further privatisation
will
impact on Telstra's quality of service or price of calls.

Fact 1: By law the USO requires that all Australians receive reasonable
access to the standard telephone service on an equitable basis wherever
they live or work.

	So don't believe Labor when they claim Telstra would only
	provide services which are economic.

Fact 2: The CSG sets in law the timeframe in which carriers must provide
new services and repair faults to existing services or pay compensation.

	So don't believe Labor when they claim service standards would
	fall. In fact, service standards have been improving
significantly
	over the last three years.