AM—Coonan confident of improved Telstra services after sale

AM—Thursday, 18 August , 2005  08:08:00
Reporter: Catherine McGrath

TONY EASTLEY: The Communications Minister Helen Coonan says the sale of Telstra will enhance services to consumers, improve competition and modernise Australian telecommunications.

From the sale, $800 million will be spent on broadband connections and other money will go to online education as well as online health.

Communications Minister Helen Coonan is in our Canberra studio, to speak with her our Chief Political Correspondent Catherine McGrath.

CATHERINE MCGRATH: Senator Coonan Good Morning.

HELEN COONAN: Good Morning Catherine.

CATHERINE MCGRATH: Haven't the community already rejected this, with recent news polls showing 70 per cent of Australian don't even want Telstra privatised?

HELEN COONAN: I think that has to be balanced, Catherine, with a very similar figure which said that many Australians are now much more happy. I think the figure was something like 79 per cent were much happier, particularly people in rural and regional Australia, with the services that they're now getting.

So that, I think, balances the emotional attachment to Telstra, because we don't need to own Telstra to regulate it. And I think that that's a message that we can't say enough, that owning Telstra doesn't deliver good services.

Properly regulating the telecommunications market, getting more choice for consumers, getting a proper mix of technologies as Mr Budde has just said - these are the sorts of things. Competition drives better outcomes for consumers, not the Government having a static ownership in a telecommunication company.

CATHERINE MCGRATH: But when independents like Tony Windsor say it's a massive con and the National Party will be destroyed electorally as a result of this, some of that message rings true in the electorate, doesn't it?

HELEN COONAN: Well not, I think, if you look at the total package. I mean, what was announced yesterday by the Government, I think is a strategic, even a visionary plan for future proofing telecommunications in Australia.

It builds on a billion dollars already invested to get services adequate throughout rural and regional Australia and they've improved immeasurably. I mean, ten years ago people barely had a telephone. Now they're worrying about how fast their broadband is.

CATHERINE MCGRATH: But repair times are still slow. Peter Corish, you heard this morning, NFF, a reasonable person, an ally of the Government effectively, but he's saying repair times are too slow.

HELEN COONAN: Well, there's both a universal service obligation that relates to basic telephony and a customer service guarantee that requires repairs within certain timeframes and a regulator to enforce those timeframes. So I'm not quite sure what he means.

There's a network reliability framework and indeed Telstra has earmarked $200 million to remediate exchanges. It hasn't been announced, it was to be announced a couple of weeks ago, I understand it's still on the table. That should address those very problems.

CATHERINE MCGRATH: Well, Telstra wanted a lot more - $5 billion to be spent by the Government. Was their original claim outrageous, over the top?

HELEN COONAN: Well, it was inappropriate in as much as firstly, Telstra was a late entrant and one of many proposals that have been brought to Government over the past several months as to ways in which we could look at this issue.

Secondly, Telstra's proposal would've locked us only in to Telstra's technology choices rather than, as Mr Budde says, having a situation where you can have a combination of technologies, you can respond to where the new technologies go and you also encourage competition.

We've got over 20, no sorry, 38 providers who roll out this kind of infrastructure in rural and regional Australia and we've got some fabulous new proposals where footprints, for instance, over pay television now may be able to deliver broadband in rural Australia. So you wouldn't want to lock yourself in to just one choice.

Telstra, on the other hand, will get a fair share, probably the lion's share of a lot of these subsidies.

CATHERINE MCGRATH: And yet Telstra is going to publicly once a month publish what it says is the financial impact of the new regulations, and it's called your decisions yesterday draconian.

Now, is that just sour grapes?

HELEN COONAN: Well, I find that difficult to accept, because the regulation will be right when we're at the end of this process and on the one hand you had the ACC suggesting that Telstra was too big to regulate, too difficult to regulate.

On the other hand you had Telstra wanting less regulation, in fact the condition of Telstra's proposal was that they shouldn't… we should roll back regulation to allow them to do this.

So, what I've come up with in between is something that has been developed with Telstra, to suit Telstra's business model that should not have a huge financial impact on Telstra, but should have immeasurable benefits to the competitive environment.

CATHERINE MCGRATH: What guarantee can you give Australians about broadband coverage, particularly in those black spots we heard about just then from Paul Budde - outer metropolitan areas?

Will they get 100 per cent coverage?

HELEN COONAN: Well, what we are proposing with this package, which is almost $900 million just for broadband alone, that's before we get into the innovative broadband that we've… the clever networks that we've also provided another $113 million for.

Once you do get this roll-out across Australia, we know we need to pass about another one million, three hundred homes under the old HiBIS scheme, we know what the take up is, we know this is all demand driven and we do have the money to deliver for all Australians.

CATHERINE MCGRATH: Senator Helen Coonan thanks for speaking to AM this morning.

TONY EASTLEY: And the Communications Minister was speaking with our Chief Political Correspondent Catherine McGrath.