Opinion: Conroy "deserves knighthood" for canning OPEL

The CRN reader said the incumbent government’s granting of $1 billion to OPEL was a gross misuse of public funds.

The reader stated: “Conroy deserves a Knighthood for having the courage to can the deal. Former Coalition ministers have admitted they made a mistake privatising Telstra and since then neither Telstra nor Optus have endeared themselves to Australia’s tax payers.”

“My preference is for any future taxpayer funded IT&T infrastructure to be majority owned by our Government and take a leaf from New Zealand by separating wholesale, distribution and retail – this way everyone benefits,” added the reader.

Conroy’s decision has also been welcomed by independent telecommunication analyst, Paul Budde, who said OPEL was always going to be a problem in terms of the new government plans for a National Broadband Network.

“Unlike the previous government, the Rudd Government has taken a far more strategic approach towards broadband. OPEL did not fit into that approach and during the past months I sensed a lack of communication between the two parties, and this became obvious in the Optus press release. I don’t wish to place blame, but I strongly believe that, with effort, a solution could have been found,” he said.

Budde stated that he agreed with the government that the public didn’t want yet another hopscotch approach to broadband, and OPEL was something that didn’t fit with the government’s integrated vision.

“The problem was that for the preceding ten years the previous government had not taken a strategic approach to its telecom plans. In the case of OPEL, the decision arrived at by the then Department of Communications was ill-advised; the solution was based on politics rather than a sound strategy, and the outcome was a negative one,” he said.

However, Budde believes the Minister is taking a high-risk political route here. He could have had a rather easy win with some 900,000 broadband connections in regional Australia, but instead decided on a more strategic plan. “The buck now stops with him,” he said.

Will he actually be able to deliver on his promises of open networks, competition and innovation? By eliminating OPEL Conroy killed what could have become a formidable competitor to Telstra. Extremely worried about OPEL, Telstra went to great lengths to badmouth the initiative.

“The Minister will need to come up with a damn good outcome to deliver on his National Broadband Network plan – it needs to be nothing less than serious structural changes to our industry, which will result in a separation of infrastructure and services. This is the only outcome that will enable the building of competition and innovation in Australia,” he said.

It would be unacceptable in political terms if the OPEL cancellation were to lead to a waiting time of up to seven years for these 900,000 customers/voters. I don’t agree with the Department that WiMAX would have been unable to deliver on its promise – particularly in view of the fact that, after it had acquired the licensed spectrum from Austar, Optus was in a prime position to deliver on its promise of 900,000 connected homes. There is no other short-term solution for a regional broadband upgrade without the use of wireless, he said.

“On balance, I agree with a strategic approach to the National Broadband Network and, if implemented along the lines mentioned above, there could still be significant wins for those who are now seen as the losers. At the same time, the pressure is now on the Minister to force Telstra to play ball and accept a truly open network approach, not just for the new network but for the rest of the national [Telstra] network also. These two will be intrinsically intertwined, there is no room for a halfway house here,” said Budde.

According to Budde, the hard reality is that this will lead to a significant loss in the monopolistic profits that Telstra collects from its Australian users, and no company in the world would accept this without being forced into it. The only one who can force them to change is the Minister. Telstra is one of the last of the incumbents left in the developed world that is still able to extract these monopolistic rents.

The Minister has raised the bar for his own performance, and that of the Rudd Government and the next milestone will be June, when the Minister will release the tender documents that will reveal the parameters for his NBN, he said.