The Guardian 20 July, 2005
Backlash against Telstra sell-off
The extent of opposition to the full privatisation of Telstra has been coming to the surface over the past couple of weeks. Farmers in NSW are up in arms over the proposed sale. A NSW Farmers' Association survey shows that 80 percent of the state's farmers oppose the sell-off. And the Howard government was also forced to make personnel changes in order to push its sale pitch: a hobby farmer got the nod as leader of the National Party and a ruthless privateer who has destroyed regional phone services in the USA was appointed chief executive of Telstra.
The NSW Farmers' Association called phone services in rural NSW "a joke". Its president Mal Peters added that the government's plans for the provision of services after the sale of Telstra were "inadequate". He said the Association had seen the post-sale legislation and declared it totally unsatisfactory.
"We need to make sure there is a mechanism to ensure the bush is protected", he said. Farmers are calling for an affordable, equitable telecommunications service and point out that full privatisation will result in parts of rural Australia being left "without this basic human right".
This is precisely what will happen under essentially unbridled for-profit provision of telecommunications services around the country. The current cross-subsidisation of services by Telstra, which keeps phone costs for users in regional areas at the same levels as more highly populated areas, would be dumped. "Competition" will reign supreme, meaning profit first, last and always.
Cross-subsidisation is considered anti-competitive under World Trade Organisation rules, which the government is clearly being guided by, as well as under the Free Trade Agreement between the US and Australia.
Telstra has a community service obligation, by law, to provide services at an equal cost and quality to all users. That there is a poorer level of service provision in the bush is a result of massive cut- backs to Telstra's staff levels and the corporatisation and contracting out of various parts of the network by the government. The government, in fact, claims that the 51 percent public ownership of Telstra is the problem and selling it off is the solution, but their spin is not fooling anyone.
The farmers are saying there must be a mechanism to protect the bush, such as an investment fund. This would in effect be a form of subsidy enabling private telecoms to make even more profits, with no long-term guarantees.
The farmer backlash comes after a change in leadership of the National Party — Mark Vaile, hobby farmer and former Trade Minister, for John Anderson, who bowed out claiming health problems but whose real problem was that he is a real farmer. Despite his credentials as a member of Howard's reactionary team, taking away telecommunications from the rural community was not his forte.
Vaile is a truly self-seeking head-kicker who brokered the trade agreement with the US, which among many other things will hit farmers as they are stripped of protection against the produce of subsidised American farmers. He and Telstra's new chief executive Solomon Trujillo are just the ticket to ram through Telstra's privatisation.
As head of the giant telco US West, which serviced the north-west of the USA, Trujillo was the architect of one of the most disastrous levels of service ever provided to regional America. "He cut back on services so he could improve profits. He's highly successful at getting results in the short term and then he walks away", said US West's former head of personnel.
As a fully publicly-owned network, Telstra poured profits back into developing new technology to provide comprehensive and interconnected cutting-edge services, it was one of the largest employers of apprentices and technicians and service provision was its main aim. Its commitment to service provision equity is still officially part of its public service obligations. The more it is privatised, the harder it is for Telstra to meet its undertakings to the community and the greater its obligations to make ever larger profits and dump less profitable or unprofitable services such as to rural Australia. It certainly should not be in private hands in its entirety. The government should be exercising its majority holding to ensure modern, affordable services are maintained in rural Australia.