From
http://business.smh.com.au/opels-dea...0403-238z.html
WHEN Kevin Rudd's Government swept into power in November last year,
Telstra's American boss, Sol Trujillo, must have gone to the liquor cabinet
and broken out the "good stuff". Under a Coalition government Telstra was
paddling against the tide. John Howard and Helen Coonan had been fighting
Telstra's commercial push for years and had opened the door to finance a
rival consortium to build broadband infrastructure in the bush.
But it was about more than public policy versus business. When it came to
Telstra and the Coalition, it was personal.
Despite protests from Coonan that she was motivated only by public-policy
considerations, the fact is that the abuse she and her government endured at
the hands of Trujillo and his public relations advisors rendered it near
impossible for the two sides to deal.
It came as no surprise that the Howard government handed a near-$1 billion
contract to Telstra's competitors to deliver broadband to the bush.
Equally, industry players were not that shocked yesterday when the Broadband
and Communications Minister, Stephen Conroy, backed out of the $1 billion
handout to Optus and rural services company, Futuris, parent of Elders, to
deliver these communications services to those in the bush.
While Conroy had never been a fan of the Optus/Futuris subsidy, on gaining
office he had given a commitment to honour the contract. But yesterday's
reversal was testament to the fact that the new Government reckons it's got
enough wriggle room to squeeze out of this obligation.
Needless to say Optus and Futuris don't agree and it's a real bet a court
will ultimately have to decide which party is right.
Conroy has plenty of incentive to have doubts about the contract. The first
is the circumstances under which it was awarded. It started as a $600
million handout, which was increased to $958 million without proper
notification to other parties.
The second incentive is the fact that it was negotiated by the (now)
opposition party.
Additionally the Government contends that it won't meet the required
population coverage. The OPEL syndicate (Optus and Elders/Futuris)
disagrees.
The next reason (and the only one that is really legitimate) is that it will
represent an infrastructure overlap with the fibre to the node (FTTN)
communications infrastructure that the Government has undertaken to build as
a public-private partnership.
The risk of overlap is real and the Government has a responsibility to spend
taxpayers' money in a way that is not tantamount to flushing it down the
toilet.