A Rudd-led e-Revolution?


After Saturday’s Labor victory, what’s next for the telecoms industry? It will be very interesting to see how the Government’s broadband policies are further developed and, even more importantly, how they will be executed.

This election put broadband on the national agenda; there aren’t many other countries in the world where this important element of national infrastructure has been so widely debated.

The subject has generated heated discussion because the stakes are extremely high in one way or another, some $5 billion worth of direct or indirect government spending and who wouldn’t want a share of that?

All the signs indicate that the incoming Government is willing to sit down with the industry and discuss how to proceed from here. The broad outline of its plans are in place and there is general agreement between the new Government and most players in the industry – and, importantly, there is room for discussion.

Key policy issues where there is a broad consensus between the Government and the industry include:

  • A national plan for both metro and regional Australia;
  • Infrastructure based on an open network policy (no monopoly);
  • If we get this right it will have enormous positive economic and social benefits in healthcare, education, energy saving;
  • Fibre-to-the-home (FttH) is the final goal and Fibre-to-the-node (FttN) is a major step in that direction;
  • Supplementary technologies can and will be deployed based on local situations.

As all the players seem to agree that the best solution for the country is also the best solution for the industry, the players should be able to harness this unique level of goodwill and use it to everyone’s advantage.

Image thanks to Fiona Katauskas.

High on the industry agenda is a high-level FttH vision which will shortly be presented to the new Minister, Stephen Conroy. This vision has been developed over the last month and will include ideas and suggestions for an infrastructure that supports e-health applications (video monitoring of patients, elderly people, remote diagnostics); smart grid (linking the electricity network to broadband, allowing utilities and their customers to save energy); tele-education; as well as e-entertainment, of course.

It will be very interesting to see if Telstra is prepared to play ball. This would mean the big telco accepting the new Government’s open networks concept and genuinely working with both the Government and the industry towards solutions that are good for the country, for competition and for innovation.

That would be a massive turnaround for Telstra.

But if it doesn’t play ball, its situation will be worse under this new Government, and we can expect all-out war a war even bigger than the one waged between Telstra and the previous administration. The down side would be that it would make it extremely difficult for Labor to speedily implement its plans and, in the worst case scenario, it could take three years to execute its FttN plan.

This would be disastrous for the Government reflecting badly on a policy that was a major part of its election campaign. Ministers and bureaucrats would be dragged through the courts as Telstra tries to hold onto its monopoly.

Nothing less than very, very tough structural separation legislation will ensure Labor’s capacity to execute its plans under such a scenario, but even this could take at least a year which would undermine Labor’s promise to start rolling out the new infrastructure in 2008.

There is still a reasonable chance that Telstra will pre-empt all of this and announce its own structural separation, since this would still be financially lucrative for the management team. Although, to date, they have indicated that they prefer a vertically integrated future.

Now is the time to ensure that we learn from the lessons of 2007. We need a national solution not an ongoing range of partial solutions, and strong legislation is required to ensure we don’t end up with endless delays, court cases and mud-slinging matches.

This is all about infrastructure for e-health, education, smart electricity grids not just for fast broadband access to the Internet. The process needs to be transparent, with full industry participation.

This infrastructure will be with us for the next 25 years, so we need to get it right.

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