[LINK] Telstra - taking its ball and going home.

[Frank O'Connor]

G'day Marghanita,

At 6:05 PM +1000 on 9/8/06 you wrote:
>Frank,
>
>Putting  it most simply...should the mum and dad shareholders of 
>Telstra forego their dividend to pay for telecommunications in the 
>country?

As opposed to watching the capital value of their shares drop as 
Telstra's double counted, obsolete and unserviced infrastructure 
deteriorates? As opposed to the company they invested in failing to 
invest in the future value of their shares?

As the Americans and others (who don't habitually pay dividends on 
shares) realise, without investment in the future technology based 
companies are sitting ducks. In Australia we like our dividends ... 
but is the average Telstra shareholder happy with the share price 
drop? I think not ... what had been about a 30 cent per annum 
dividend per share has to be taken in context of a $1.20 per annum 
drop in share price.

The dividend is a furphy when you get share price performance like that.

>
>My own view, is that the sooner the USO is separated from Telstra the better.

The USO is garbage ... agreed. It's a coalition and Labour holdover 
and vote winner. You won't find any of them offering to ditch it. 
That said, the government was offering $2-3 billion for whoever 
'improved services to the bush' and $2-3 billion is not to be sneezed 
at.

>
>We could debate whether telcos pay for the USO over and above their 
>license fees or whether the USO comes out of the license fees and 
>taxes the government collects.

As I intimated I have some sympathy for the taxpayer paying 
collectively for the USO. Our comms infrastructure is a national 
asset - like health, education and transport. The question is how 
much Telstra and any others who are capable of it should dip into the 
public coffers, when one of the net results of upgrading their 
network to provide for the USO would be a vast increase in the value 
of their capital assets - at taxpayer expense. You answer me how that 
question is to be solved. The government made an offer of $2-3 
billion ($4 billion if you count the BC below - I see no distinction 
these days between types of communication over the same MEDIUM) ... 
and Telstra chose to write that out of its equations.

What Telstra wants is the lions share of the USO funds, the lions 
share of the BC, the right to preclude other players from the network 
the taxpayer has thus funded, the trashing of the regulations that 
govern how it conducts itself (except of course those portions of the 
Telecommunications Acts that ensure its enshrined monopoly), the 
capital increase that the infrastructure spending would give it and 
all kudos and bonuses should go to its beancounters and executives 
for proposing this.

That said ... I don't see any of that as necessary any more. 
Technology is for once moving faster than the beancounters.

>
>The government would seek tenders and fund the delivery of non 
>commercially viable areas or maybe each telco would be allocated a 
>few regions to deliver services, if the residents/constituents 
>aren't happy they can take it up with their MPs....

As I said above ... I can't see any of our politicians abandoning the 
USO. Pretty much like they won't abandon their Digital TV policy 
(although the number of concerned constituents there is MUCH less), 
or any other technologically uninformed 'policies' they currently 
espouse.

>
>Any comments on this program?
><http://www.dcita.gov.au/tel/broadband_connect>

Broadband Connect is pretty much the same as the USO IMHO - an IP USO 
(and another $800 million to add to the above)... even in the city if 
you're more than 2 kilometers from an exchange, or not in a 
suburb/district serviced by cable your 'broadband' drops off like 
crazy. In a widely distributed environment like the bush (and I have 
a few friends and relatives who live there) comms performance is even 
more marginal because of the distances and infrastructure involved. 
So ... for the bush to achieve parity with the city (even with 
Telstra's FTTN in place) you'd probably get away with so many 
exclusions (the same exclusions as apply in the city) that the BC 
would be impossible to police and 'money for jam' as they say.

That said ...

1. Fibre is widely distributed through much of the Eastern states already.
2. Wireless routers and access points are probably cheaper to run off 
the fibre (at various locations) rather than building/upgrading new 
exchanges.
3. Satellite service is OK (despite the latency problems)
4. ADSL probably ain't an option for most of the bush ... but may be 
for country towns if the price of DSLAM's comes down.
5. Cable is a no goer (it was always a bit of a waste of time and 
money really ... 80's technology installed in the 90's, when the 
moneyt would have been better spent on fibre.)
6. Unless Telstra (or a third party) was willing to do 
fibre-to-the-door in the city and country (and I can't see anyone 
doing that now - especially with other solutions pending) service 
guarantees and performance would be completely uneforceable.

I note you're big on wireless ... I've been a user for about 6 or 7 
years. But WiFi/WiMax and like alternatives suffer from many of the 
same deficiencies other mediums do (and in some cases more). I 
currently don't see wireless as a long term alternative for the city 
unless they can upscale it like hell, solve the distance and 
interference problems, and provide consistent performance in the 100 
Mbs range per node - and that's a way off.

That said, in future wireless is probably a good alternative for the 
bush (particularly 802.16n when its finally agreed on).

					Regards,

>
>Frank O'Connor wrote:
>>The government was planning to make $2-3 billion available as part 
>>of their ploy for appeasing the Nationals on the Telstra sale ... 
>>which presumably would have gone into the infrastructuring of 
>>remote non-urban areas that Telstra would have considered 
>>uneconomic.
>>
>>Now ... $2-3 billion buys an awful lot of fibre to the town (most 
>>of which is already there in Victoria and NSW) and Satellite and 
>>Wireless and other means to the farm. Telstra was of the opinion 
>>this was insufficient ... so maybe they could let us know what 
>>would be sufficient.
>>
>>The bottom line I suppose is that Telstra wants nothing to do with 
>>the bush, the government relies on the bush for votes and seats, 
>>and in any event the bush deserves some consideration viz-a-viz 
>>telecommunications.
>>
>>None of the above of course excuses Telstra for its 20-30 years of 
>>neglect of the network. They had the right idea in the late 70's 
>>... "lets lay fibre" ... but they never took it to its proper 
>>conclusion. (Perhaps because the governments of the time were more 
>>interested in their annual multi-billion dollar dividend than 
>>providing network infrastructure, and since the privatisation this 
>>mind-set didn't change. As I said in an earlier post ... bean 
>>counters run Telstra.)
>>
>>Net result: A dinosaur has more prospects of survival than an 
>>increasingly obsolete Telstra. They're way slow on the wholesale 
>>end, still have to get to grips with the 'client satisfaction' and 
>>'service' and 'value' things on the retail end, and unless Sol 
>>really pulls a rabbit out of the hat tomorrow ... are bereft of 
>>ideas, plans and strategies for the future.
>>
>>                             Regards,
>>
>>At 12:08 PM +1000 9/8/06, Marghanita da Cruz wrote:
>>
>>>Howard Lowndes wrote:
>>>
>>>>...and once again the rural/regionals have to wait.  I have 2 
>>>>clients whose circuits have only just been upgraded (or perhaps 
>>>>the dBA standards threshold has been downgraded) enough to enable 
>>>>vanilla DSL.
>>>>
>>>>In fact one rural customer has 10 lines into their premises and 
>>>>only 1 came up to snuff, the other were either RIMs or just plain 
>>>>too noisy.
>>>
>>>
>>>...so whose responsibility is this and how should this 
>>>infrastructure be funded...there was a snippet about Telstra 
>>>agreeing to do the rural stuff if the other telcos paid for it, 
>>>presumeably through the USO.
>>>
>>>Marghanita
>>>--
>>>Marghanita da Cruz
>>>Ramin Communications
>>>http://www.ramin.com.au
>>>Phone: 0414-869202
>>>Email: marghanita at ramin.com.au
>>>
>>>
>>>
>>>
>>>_______________________________________________
>>>Link mailing list
>>>Link at mailman.anu.edu.au
>>>http://mailman.anu.edu.au/mailman/listinfo/link
>>
>>
>
>
>--
>Marghanita da Cruz
>Ramin Communications
>http://www.ramin.com.au
>Phone: 0414-869202
>Email: marghanita at ramin.com.au