From
http://www.smh.com.au/news/business/...941336752.html

The telco's amigos are playing a high stakes game with the Federal
Government on regulation but, as Matt O'Sullivan reports, the strategy could
backfire spectacularly.

'What are my friends Sol and Phil doing now?" quips Tom Friedberg in a
jocular American twang almost as soon as he hears a foreign accent on the
other end of the phoneline.

The ex-United States telecom director turned consultant is referring to Sol
Trujillo, the maverick chief executive guiding Telstra through its biggest
upheaval, and his external headkicker and mouthpiece, Phil Burgess.

The best pals have astounded everyone since arriving in Australia almost in
tandem more than two years ago. Not so much for their plans to transform
Telstra from a branch of the public service, but for the unrelenting - and
often personal - attacks aimed at changing the rules governing
telecommunications. No one has been spared the Americans' spray, be they
rival executives, competition regulators, senior politicians, industry
chieftains or journalists.

The high-risk strategy has come at a cost. The lines between the ex-boss of
the regional telecom US West and the Federal Government have been severed,
leaving even senior Telstra confidants dumbfounded by the American
management's desire to wage a political campaign right up to polling day.

"For someone whose tenure was predicated on political astuteness to get to
the top of US West, it seems that he and his retainers are politically tone
deaf," says Friedberg, a director at US West's cellular division in the
early '90s who worked alongside Bill Stewart, another of Trujillo's mates
ensconced at Telstra. "He might be fundamentally right from an investment
point of view but he has played it wrong. And Phil is the sort of guy who
likes throwing napalm on the misfire - it's almost like a Mad Max movie."

Telstra's multi-pronged fight to preserve its near monopoly is unprecedented
in Australian corporate history - and, for that matter, almost unheard of in
the US. Trujillo has given Burgess free rein to use almost any means at his
disposal to rally shareholders and customers to Telstra's cause.

But where's the success? Telstra might have scored brownie points in
elevating broadband to be a big irritant for the Government ahead of polling
day, but it has failed in almost every regard to foist change upon it.
Instead, it has left investors wondering what tools it has remaining to
leverage deals in Canberra.

And should Labor win on November 24, will a Rudd government alter
legislation to be more favourable to Telstra and its 1.6 million
shareholders at the expense of 20 million consumers?

To date, Telstra's board has presented a united front at the behest of
Donald McGauchie, its steely chairman and former confidant of the Prime
Minister. But the cracks have started to emerge in recent months with the
sudden resignation of director Belinda Hutchinson.

"It astounds me, privately," says an investment banker of Trujillo's
strategy. "For Sol, 'This is just a war of attrition and we will fight as
long as we have breath in our body'.'

A t first glance, Solomon Dennis Trujillo's emergence from obscurity in the
outlying suburbs of Wyoming's capital, Cheyenne, reads like a rags-to-riches
story. Records describe him growing up in the 1950s as a "white boy" whose
father, Solomon M. Trujillo, worked as a truck driver for a house-moving
company and as a railroad worker for Union Pacific. His mum, Theresa, toiled
as a clerk and "assistant cashier" at a corner store. A pupil of St Mary's
Catholic School, he went on to the University of Wyoming where he gained an
MBA and met his future wife, Corine.

But it would take him more than two decades to climb the ladder at US West
to become boss in 1998 and earn the title of "America's top Hispanic
businessman".

The riches have flowed freely since, as he earned directorships on the
boards of Bank of America and PepsiCo, the latter position explaining his
penchant for Gatorade and PepsiMax and loathing of Coke.

Today, King Sol personifies the archetypal American businessman, earning the
right to live the high life that has seen him circle the globe in corporate
jets and dine at the finest hotels.

Although his tenure at the helm of US West Inc lasted less than two years,
Trujillo did not hold back from lashing out at regulation before he sold the
Baby Bell in 2000. From the headquarters at 18th and California streets in
downtown Denver, he complained that regulation handcuffed the company while
allowing rivals to "cream-skim" its best customers.

Now, almost a decade after calling for US regulators to "let the marketplace
work", Trujillo is humming the same tune to a bemused audience on the other
side of the world.

This time, Team Telstra is playing a more high-risk game, taking on a
government and regulator in what analysts describe as a no-win battle. Its
tactics range from polling shareholders and offering them tool kits for tips
on calling talkback radio, to taking legal action against the Communications
Minister, Helen Coonan.