BLACKMAIL of the worst kind. Destruction of Telstra shareholders savings.
Cowardly, stupid behaviour by government. Wrecking the prospect of
investment and innovation.
Yes, Phil Burgess is back in town. And there's absolutely no chance now of
his mum ever buying Telstra shares.
"I think the move by the Rudd government will destroy Telstra's future," he
Telstra's outspoken former head of public policy may have left the company
and the country but he still aggressively defends Telstra against any
government assault. Right now, of course, he's appalled.
A trip back in Australia to see friends happened to coincide with Canberra's
announcement last Tuesday that it would effectively force Telstra to split
its wholesale and retail arms. He has extended his stay as a result to watch
the reaction first-hand.
"It's a radical move that has to be disturbing to a lot of people," he says.
"Whether it's punters who are shareholders or people in boardrooms wondering
who's next. It will make overseas investors think twice about investing in
"And it's cowardly and disingenuous to try to get the Telstra board to do
the government's dirty work by holding a gun to the board's head."
Not that he's letting the board and new management of Telstra off lightly
either. "If you don't call a blackmailer for what they are, you pay the
price forever," he insists.
"The board is getting what it asked for. If you announce in advance that you
are not going to stand up for your rights and your shareholders rights, bad
things are going to happen and they have. It's the law of the jungle and if
you act like prey, you will be preyed upon."
Burgess was one of the team of Americans brought over by former chief
executive Sol Trujillo four years ago. He immediately earned a reputation
for his regular and colourful denunciations of government and the Australian
Competition & Consumer Commission over their regulation of Telstra.
To focus attention on the issue, he famously said he would not advise his
mother to buy Telstra shares.
In an attempt to repair relations with Canberra, the Telstra board moved
against Trujillo and then chairman Donald McGauchie earlier this year.
Burgess had already gone.
But Burgess has one word for people who try to suggest that Telstra finds
itself in this predicament because of the intransigence of the former
"Both Graeme Samuel at the ACCC and (Communications Minister) Stephen Conroy
have talked at length about how this should have been done 20 year ago," he
"A break-up of Telstra was part of the ALP's plan from the beginning.
"Sol has been gone six months and the new make-nice board and speak-softly,
softly management hasn't worked. As Donald McGauchie said, 10 years of
appeasement of the government led to a very bad result for Telstra. That's
why we had to change and turn it into a real company with world-leading
And now, he argues, government is back to making "stupid decisions" that
will delay innovation and investment and not lead to cheaper prices.
"Vertical separation doesn't make any sense," he says. "It's particularly
ill-advised at the early stages of a technology revolution.
"The government is making it up as it goes along. They are still doing
broadband in this country by press release and paper shuffling. Planning,
planning, planning. Thinking, thinking, thinking. There is no real