the great rudd ripp off, page-21

This is not Rudd bashing, as the Liberal's are as much to blame over the years.

For many years Telstra had argued that under competition policy (the ACCC) access to its network was done on a less than cost basis.

IMO, when you run a business you look for a return on capital invested (to shareholders), plus a retun that will allow you to reinvest into the business for future growth and increasing rewards.

Government competition policy was aimed at bringing cheaper prices to the consumer (politically strategic). However, IMO this came at a great cost to re-investment.

Australia has to my mind many strategic variables in the provision of Telecommunications infrastructure. We are after all a vast continent with a relatively small population. Our population is mainly confined to coastal cities, with all other regions sparsely populated.

Telstra, under regulation, was required to provide services that were not cost-efficient, impacting profitability in return for its "monopoly".

In a "free-market" Telstra would have provided access on a profit basis. Sure we would have paid more, but this IMO is more a product of demographics and geography. For areas with no "profit-motive" the government would need to have subsided the cost on an equity basis.

Now we have a government NBN propsal because no one else can build it. If over time Telstra was allowed to charge "market" prices it is my view that they would have upgraded services where a cost-benefit and profit motive existed. Government then could have subsidised the balance to regional and rural areas at far less cost to the taxpayer.

I am sure Telstra could easily build a network to compete with the NBN in areas of high population. That is why the government has undertaken a review of the regulatory framework. I think you will find, such regulation, will mean Telstra (and others) will not be allowed to compete with the NBN (fixed line services). This will allow the NBN to develop some form of commercial return through being a "monopoly".

Telstra, Optus et all will have no option other than to roll their existing fibre networks into the NBN for an equity share in the new company (to maintain at least some value in the investments already made). This will not be so much from the threat of competition but the threat of being regulated out of the business, destroying the value of the initial investments.

The government will have a win, as cost will be reduced to build the NBN due to the capture of existing assets. However, it will in reality be a cover-up for failed competition policy and failed government intervention. The real losers will be the TLS shareholders who were sold a business which effectively was a government instrument through regulation and this same regulation will buy it up and recycle it out again to a future generation of unsuspecting punters.

Just my thoughts.

Cheers