From
http://www.smh.com.au/news/business/...091194035.html

THE Communications Minister, Helen Coonan, has demanded that Telstra's board
rein in its American executives, including boss Sol Trujillo, fearing the
company's political campaigning against regulation will hurt it in the
federal election.

In a fresh sign of the Government's concern over a sensitive election issue,
Senator Coonan warned yesterday that consumers would punish the company if
it continues to campaign in marginal electorates.

Her inflammatory comments come as the relationship between the two plumbed
new lows this week after Telstra began mailing letters to its 1.6 million
shareholders attacking the Government's stance on regulation of
telecommunications.

"They can target marginal seats at their peril because they are losing
customers and they are losing the confidence of regional and rural
Australia," Senator Coonan told the Herald yesterday.

She claimed that corporate Australia was "agog" at the unprecedented
campaigning by a blue-chip company against a government. Telstra's strategy
has included calls for shareholders to lobby their local MPs and to ring
talkback radio.

"If the board of Telstra had any ability to control the management, they
should be taking a strong stand here and reining them in and explaining to
them that Telstra has a business to run," she said.

"It's a shame that the chairman and the board of a major Australian
corporation are prepared to lend their names and reputation to this kind of
political campaign."

Last night Telstra made clear it would not back down from campaigning on
regulation.

"While Telstra seeks a public discussion of the virtues of broadband, the
minister has made claims, many of them personal in nature, and many of them
unsupported - or contradicted - by the facts," Telstra's spokesman, Andrew
Maiden, said.

"Telstra does not seek special treatment. We simply seek rules that support
investment in Australia's broadband future."

Telstra has taken legal action in the Federal Court against Senator Coonan
twice in the last two months. Earlier this year the company also launched a
constitutional challenge in the High Court against the competition
regulator's powers to set prices for access to its copper-wire network.

The legal action and broader political campaign by a company ahead of an
election has no precedent in Australian history.

Senator Coonan has not spoken to Mr Trujillo since June, when the Government
handed almost $1 billion to an Optus-led consortium to improve broadband
services in the bush.