Plaintive cries that the prospect of effective regulation of Telstra is not “fair” to Telstra shareholders overlook that the corollary of protected shareholders is disadvantaged consumers.

The alternative future proposed by these shareholders would be for Telstra to have the unfettered ability to deepen its already unsustainably dominant position in all markets, including through a right to lock up any of the public asset represented by the spectrum likely to become available for wireless applications in the future.

Under this scenario, there is simply no chance of Australians ever seeing genuine competition and internationally competitive prices and services.

Australian telecommunications markets are dangerously concentrated and becoming more so, 12 years after attempts to introduce competition. This is clear from research from ACCC published earlier this year and republished in the explanatory memorandum to the reform Bill.

To understand what life it like for consumers under a future where competitors and consumers interests are sold out to Telstra, we need look no further than regional Australia.

Citizens in regional and remote communities were competition has been unable to gain a foothold in the face of Telstra’s market power are saddled with the poorest services and the highest dissatisfaction.

Billions of dollars of tax payer subsidies over the past decade have not closed the gap between city and bush services in these places where competition has not been able to get a foothold.

The reforms to separate Telstra’s wholesale business offer these Australians the prospect, for the first time, of retailers being able to fairly and vigorously pursue them as customers. Limits on Telstra’s ability to use its financial muscle to gobble up all the future wireless spectrum creates the prospect that a new mobile entrant will have the opportunity to expand into areas beyond their reach until now.

Perhaps the fund managers complaining from their city offices – who apparently did not read the Telstra prospectus and bought shares in the belief they were entitled forever to monopoly rents – would like to go to those communities to explain why it is not “fair” for the Government to try to bring them decent competition.

Contact:

David Forman

Executive Director

CCC Inc

0438121114