Telstra’s troubles continue to mount: Kohler

Last Friday, Communications Minister Stephen Conroy announced to the national media that the national broadband network was not a dead parrot, countering my suggestion earlier that week that it had kicked the bucket, had ceased to be and was pushing up daisies, etc, etc.

It seems the winner of the national broadband network tender – one of Optus, Acacia and Axia – has already been chosen and the press release drafted. It is just awaiting the Prime Minister’s return from saving the world at the G20 leaders summit in London on 2 April because he apparently couldn’t squeeze in the press conference before he went.

Meanwhile, the ACCC has now sued Telstra for not providing access for its competitors to seven exchanges, and the case will begin in the Federal Court in the second week of April.

So April really will be the cruellest month for Telstra, to quote TS Eliot’s The Waste Land.

And yesterday, to extend the poetic reference, the sharemarket asked: “What branches grow out of this stony rubbish?” Telstra’s price was pruned 2.3% in a rising market, as analysts and fund managers started getting anxious about all these the regulatory shadows rising to meet Telstra, and coming up with “fear in a handful of dust”.

It was interesting that Telstra’s main competitor, Optus, in its press release about Telstra’s iniquities following the ACCC’s commencement of proceedings yesterday, referred to Telstra’s “alleged” denial of choice.

Optus said: “It’s a travesty that broadband consumers in areas such as Carlton, Port Melbourne and South Perth were allegedly denied choice for broadband services purely because Telstra had the market power to do so.”

Doesn’t Optus know? Is it not doing broadband in Carlton, Port Melbourne and South Perth? Hard to believe.

Telstra, meanwhile, says the cases referred to in the ACCC statement involved a few small mistakes that were rectified a year ago, and that the whole thing is a waste of time and money.

So unless Telstra’s group managing director of public policy and communications, David Quilty, is lying through his teeth, this will be a short hearing.

Either Optus and iiNet can put their DSLAM broadband equipment into Telstra’s Carlton, Port Melbourne and South Perth exchanges, or they can’t. Optus apparently doesn’t know. The ACCC press release doesn’t say the offences are ongoing, alleging instead that Telstra “has refused” access-seeker requests for interconnection – not that it “is refusing”.

If it’s a past offence, admitted and rectified, can the judge really do anything other than tick Telstra off and tell the company not to do it again?

In general, the shadows that the market can see encircling Telstra are many. This baffling court case, the still alive NBN, and the American hejira, or exodus, as Sol Trujillo, Bill Stewart and Greg Winn all pack their bags for home, defectors from the petty wars (to quote Joni Mitchell’s song Hejira).

But the market has surely overreacted. The latest court case does not mean, as some suggest, that “structural separation” is on the way. A government that can’t get a tax on alcopops through the senate is not going to succeed with the deliberate destruction of billions of dollars through legislation to split a large public company.

With the NBN we must separate the announcement from the fact. As I said yesterday, all politics these days is about spin.

The important thing for Messrs Conroy and Rudd is to make an announcement. Whether the NBN can be funded is not their problem. Either Optus or Acacia will be dubbed “NBN builder” in April and will then have to go and find the money; they will line up behind the Gunns pulp mill project, which at least has a market for its product.

Telstra is trying to arrange things so it does not have to buy access on the NBN, or at least not much, by using a combination of cable and wireless. Unless the Government is willing or able to legislate to create a statutory fibre monopoly that Telstra must use (see alcopops comment above) then the NBN is a dead parrot that is nailed to its perch.

As for the yanking of the yanks – yes the announcement that the old regime is ending without a new one in place creates uncertainty.

But I suspect we will discover that Telstra’s American revolution was actually skin deep. Sol Trujillo is the sultan of spin, the master of illusion.

He and his mates stirred the place up, got a pretty good 3G network built “on time and on budget” and carried out a barrister’s brief from the board to fiercely cross-examine the government and the ACCC.

Has it been a good idea to get everyone offside? Probably not, but it’s been quite exciting. Now the board can go back to hiring exiles from Optus.

And perhaps Telstra’s recent “Fake Stephen Conroy” kerfuffle, in which Telstra censored a Twitter profile by that name, suggests a more conciliatory approach is happening already.

Someone was writing a highly amusing stream of Twitter comments under the name @stephenconroy, based on the fake Steve Jobs blog that was popular for a while.

Such items as: “Today I received an iPhone. The IT people tell me that it is biometrically activated, but no matter how much I lick it, it won’t turn on.”

And: “Apparently LOL means ‘Laugh Out Loud’ and not ‘Lots Of Love’. Now I’m going to have to re-read all those internet comments about me.”

And: “Dear journalists; please do not continue to report on my enormous penis and ability to please the ladies. My personal life is off-limits.”

It turns out the Fake Stephen Conroy was one Leslie Nassar, a Telstra employee, who says he was told to stop, which Telstra denies.

On Monday Nassar wrote on Twitter: “Yes, I’ve been asked to stop Twittering as @stephenconroy.”

And then next day, in response to something from Mike Hickinbotham, a Telstra PR, he wrote: “What bullshit. I wasn’t told to stop? Quilty had a f***ing stroke.”

And then in a blog post on Telstra’s nowwearetalking.com.au propaganda site, entitled “The real facts about Telstra and the Fake Stephen Conroy”, Hickinbotham said Telstra did not shut down Nassar’s Twitter account.

“Leslie is not going to lose his job as a result of announcing he is the Fake Stephen Conroy,” he wrote.

No, he will lose it for being the fake Stephen Conroy, or perhaps for something else entirely.

Hey, wait a minute – I’ve got an idea…Leslie Nassar for CEO! Anyone who can get up Stephen Conroy’s nose like that is foreman material.

Related story:

• The national broadband network is dead: Kohler