* MARTIN COLLINS: John Durie * From: The Australian * March 20, 2010 12:00AM
" COMMUNICATIONS Minister Stephen Conroy's admirable determination to build an open access, fast-speed broadband network is in stark contrast to his plans to extend the free kick to free-to-air television on sports broadcasting.
The talks with Telstra on broadband are continuing, but clearly the company felt the need to say something given the extensive reports of the state of the talks with the government.
As reported here last week, the Telstra argument is being driven by finance chief John Stanhope, who, on this issue at least, has emerged as the lead negotiator and, more so than almost anyone else in the company, is the most old school on valuations of the copper network.
As in he still thinks it has value even if the rest of the world sees it crumbling away.
So the circa $4 billion valuation gap remains, and unless the issue is sorted in the next few weeks the government will draw a line in the sand and declare it will go it alone.
The market focus on the legislation is a sideshow because it was, and still is, just a negotiating ploy -- as will be the declaration that the government will go it alone on the NBN.
Both sides need each other.
Right now the government's political focus is obviously elsewhere, with health the dominant issue, but the implementation study is perceived to be good news for the government, so when the timing is right it will be released.
It will be good news because it will show the network will deliver broadband at cheaper prices than imagined and also be built at a cheaper price.
When Telstra's Stanhope had Sol Trujillo on his team, he presented the previous government with a plan to deliver a broadband network for $10bn-$15bn, which was considered reasonable.
That plan left off a couple of crucial numbers, being the Telstra compensation payments which would be deducted along the way in terms of higher consumer costs.
This was one item left off; the other of course being the fact that the plan was to build the network to the street corner instead of the home.
This plan was not only more expensive but it kept Telstra in control because it still had the last mile, being the wires into the home, under its umbrella.
This explains why the ACCC told the government the plan should be dumped.
While Conroy works to his conceptually brilliant open access broadband plan, his insistence on maintaining the outright protection to free-to-air broadcasters is just plain dumb.
On the one hand we have a minister able to deliver new-age communications and, on the other, one still believing in the dark ages and in doing so denying consumer choice.
Throw in the fact that the state of Australian copyright law is in complete disarray due to recent court decisions and we have a media policy in need of a major overhaul.
Conroy is yet to make final decisions but the game plan is not only to protect the free-to-air stations' control over key sports broadcasting but extend it by adding the internet to pay-TV as the evil empire to be kept out at all costs.
Putting to one side Foxtel's development of key sports including soccer, the contrast between the two policy decisions is extraordinary.
Conroy is unashamed, agreeing the anti-siphoning policy which hoards access to key sports to FTA television is a massive market distortion -- blatant protectionism aimed at delivering free sports to the average punter.
So when the average punter gets fast-speed broadband and wants to watch rugby league through Telstra's Big Pond the chances are that access will be severely limited.
Foxtel was hoping Conroy might stick to his stated policy of maintaining a "use it or lose it" policy, meaning if free-to-air doesn't televise the event, then pay and internet have access.
This is unlikely and instead the best Foxtel can hope for is fewer sports on the banned list.
Conroy, of course, has also delivered multi-billion-dollar subsidies to free-to-air television in terms of licence fee cuts, which means he has delivered a big boost to the private equity owners of the Nine and Seven networks.
In the old days the politically powerful owners of the television networks were granted protection but now the owners are asset shufflers with little political loyalty.
Worse still, of course, as Trade Minister Simon Crean could tell Conroy, protectionism always ends up hurting those it is said to help -- the viewing public.
That is the sad dichotomy over which Conroy is presiding"
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