Communication Minimiser Richard Alston: We can’t run the company’s business for it. It would be I think the most chilling effect on competition and the operation of the marketplace if you were to go in there and second guess the business and say, you should not buy this; you should not sell that; or you should do something else. I mean that’s just not real life. What we do is we provide subsidies such as the customer service guarantee arrangement, such as the universal service obligation, such as price caps. In a whole range of areas we apply community standards to telephone services. But we don’t try and tell businesses how to run particular parts of the operation.
The above quotation is taken from Senator Alston on the ABC programme AM yesterday morning. It is an explanation of why it is not the Government’s fault that telecommunications company One.Tel appears to have gone belly up. One its own it might be a perfectly reasonable statement of Government policy. In the context of what the Government has been doing in the telecommunications portfolio in the past six years, it is a damning piece of inconsistency. Indeed, it encapsulates all the worst elements of this Government’s communications policy.
Senator Alston was defending the Government’s decision to do nothing in the face of the collapse of One.Tel. Oh gosh, he protested, it is not for the government to lay down detailed rules about how a telecom business should conduct itself.
Rather he postulated the classic free-market view of the world that business should be allowed it to get on with business unfettered by detailed government regulation.
That would be all very well if it were a consistent government policy. But it is not. Rather it is a particular policy developed at the spur of the moment to exonerate the government from any blame for the One.Tel collapse. It was not a statement of coherent government policy and philosophic position to be applied throughout the telecommunications industry.
There was Senator Alston on AM yesterday protesting that the government could only sit back and let industry get on with its job free from the fetters of government interference, and therefore if a particular company went down the tube it was not the Government’s fault.
But this is hopelessly inconsistent with another related area of government policy, namely digital television.
Where was our wonderfully laissez-faire government when technology enabled the existing spectrum to deliver all sorts of goodies to the public? Did it say “”we don’t try and tell businesses how to run particular parts of the operation”. Not at all. Rather it dictated exactly what the businesses should do and exactly how they should run particular areas of their business. The Government laid down in fine detail how the television networks should operate digital television. It prohibited multi-channelling except in limited circumstances. It demanded that each network run 20 hours a week of high definition television. It determined limits on levels of advertising and children’s television.
It did this to protect Kerry Packer because it was scared of him, not for any benefits to the Australian viewing public. It demanded each of the five networks (ABC, SBS and the three commercials) deliver high definition digital so that each could deliver only one program stream, thus concentrating audiences and reducing costs.
Why doesn’t the laissez-faire Alston of yesterday’s AM program adopt the policy of “we don’t try and tell businesses how to run particular parts of the operation”. Well, because he and his government are simpering hypocrites who play the free-market when it suits them, but regulate with furious hypocrisy if they might upset their mates.
If he had been consistent, Senator Alston would have been able to say we do not tell the television networks how to run their businesses, or how to allocate their spectrum. But, of course, he could not. This is because the “free market” Howard Government has regulated the technical side of digital television as closely as any socialist hell-hole in the world.
Now, it may well be that One.Tel deserves to go under because it did not have a good business plan and the executive has kept the board in the dark. However, One.Tel was working in a less-than-ideal market due to the folly of government policy. The government should never have privatised Telstra the way it did it. Telstra always had two functions. One was to provide a telecommunications network for the whole nation. The other was to be a carrier on that network. As a public company it could run both those functions without conflict. But as a private company there was a fundamental conflict between being a provider and owner and up-keeper of the nation’s telecommunications network . On one hand it was a competitor with other players as a user of that network on the other it set the price and conditions of entry into the network. If Telstra it were to be privatised those two functions should have been separated. They were not. As a consequence, competitive players such as One.Tel found themselves going a cap in hand to Telstra as the owner of the network to get as favourable access as it could, while at the same time Telstra was its competitor as a user of that network. The model was fatally flawed.
In the same way, the Government’s model on digital television is fatally flawed. Rather than a having a competitive allocation of spectrum and allowing the successful bidders to do what they will with that spectrum, the government has laid down detailed and restrictive rules about how the spectrum should be used. Those rules seem to have been predicated upon appeasing the existing network owners.
The government’s of lack of purity in telecommunications in Australia is manifest. Therefore, to see Senator Alston put his hand on his heart and a bleat about how private sector enterprises such as One.Tel must live or die in the market is only so much hypocritical twaddle.