So why didnt they bid? Many Telstra employees believe the following. For years all we have heard is how much money it takes to maintain the landline network and exchanges. Since the advent of wireless broadband and Voip the profits, especially from consumer landlines are falling and will continue to do so. We have also heard from management in a non official way over the past 5 years how eventually Telstra will just want its mobile network…. hence big investments in the 3g network. As i work in an area that deals with mostly new business i have noticed a distinct trend towards people not connecting a landline at all… just working off the mobile network. This is definitely the way of the future.

This is just a theory but it makes sense.

This process of discussion which leads to further understanding is the most joyous part of writing for this interactive environment called a blog. I hate the word blog, but I love the process.

Thank you all — even the people who disagree with me, because you force me to re-examine my own thinking. Sometimes that leads me to change my mind. Sometimes it helps me find the right words, the right explanation for why I was right after all.

Telstra has NEVER believed that a second on-the-ground (terrestrial) network would ever be built without massive amounts of corporate welfare from the government and took the punt that the Howard administration would never undermine good old fashioned Capitalism. Or Monopolism. Telstra’s biggest fear was having it’s national network (albeit twisted copper) off their books before / during their privatisation process. That process is now comfortably out of the way. But they always knew the government would change.

Telstra Wholesale in the late nineties was all about infrastructure. Telstra’s NDC division was so busy installing that new fangled ‘Fibre’ thing that companies like John Holland and (was it?) VisionStream were contracted to keep up with the ‘anticipated demand’. There’s nothing imaginary about the many hundreds of kilometres of Dark Fibre out there.

Then there’s the start-ups like Comindico (whatever happened to them?) and the like who just started rolling out fibre optic cable while having bugger-all customers. Lots went broke. What happened to their ‘networks’?. From the Pilbara to Perth and Kalgoorlie, Warrnambool to Geelong and Melbourne. Even Mt Gambier has fibre optic cable sitting there. It’s kind of like rats. There’s bound to be some fibre optic cable within about six feet of you…

Telstra’s exchanges were also overhauled and the old analogue AKE / ARF / ARM were removed allowing for a SHITLOAD of digital nodes and switches. Heaps went unused for years. At some point (in order to get some kind of usage (= billing) out of some quite expensive dust-gatherers) Telstra started offering some kind of high end data exchange service to multi-site Corporate customers. Either ColesMyer or Woolworths had threatened to take their accounts to a quickly hobbled together consortium of second-tier players. Suddenly Telstra could do that, but not Broadband for poor people.

So, Telstra leveraged off the network ‘We the People’ owned during it’s sale process to get a pretty good share price and whopping cash injection. Took that cash, installed fibre optic cable til it was dangling out of it’s trousers, looked the other way hoping someone would come along and pay for their new network. Again.

@iamtheantigeek: Are you the Anti-Geek who sometimes writes for Crikey?

As it happens, Telstra’s only responsibility is to its shareholders, and indeed it is illegal for a company director to do anything other than “increase shareholder value” — within the law, of course. It would seem that we’re finally realising that the nation’s nervous system probably isn’t something we should leave to “market forces”.

As an aside, there’s another interesting analysis by Paul Budde in New Matilda.

But all its managers talk about is serving shareholders (some of whom include the above) even if it means denying (the above) better products at decent prices.

Australia has sniffed out this disgusting discrepancy and is fighting back, from the top down. As is proper in the networked age.

Trujillo will one day be bracketed with Al ‘Chainsaw’ Dunlap as a septic who came over and pretty much failed.

If all seven High Court judges reckon Telstra don’t own the wires, then maybe we should check their reasoning? They’ve probably put more thought into it than either of us.

Yes, Telstra is currently the biggest player, but so what? It doesn’t necessarily follow that they’re the only firm capable of building the NBN. Indeed, maybe building from a clean slate would produce a leaner, more efficient organisation than trying to work within Telstra’s legacy structure.

Telstra keeps asserting that it’s the only firm capable of doing the job, but that’s just marketing assertion. If Telstra is indeed the only firm capable of building the NBN then that’ll be clear from the analysis of the other bids.

However, if Telstra was really so certain it was the only firm for the job, then they could have just submitted a compliant bid and won, yeah? Why the 13-page incomplete submission?

Ian Verrender’s analysis in Business Day makes sense to me:

Ever since Sol Trujillo was installed as chief executive, Telstra has employed a three-step strategy to muscle out any competition.

It can be neatly condensed into three words: Bluster, Belligerence and Obfuscation…

Telstra does not want a national broadband network, particularly one that involves anyone else. That includes taxpayers.

And if one has to be built, Telstra will do everything in its power to delay or kill the process. Yesterday marked stage one in a protracted war, ultimately designed to defeat one of Prime Minister Kevin Rudd’s key election promises.

Trujillo claimed yesterday that Telstra had been unfairly excluded from the process on a technicality. That’s just rubbish.

I’ve just been told that communications minister Senator Stephen Conroy will be on The 7.30 Report tonight. For once I agree with him: there was nothing stopping Telstra submitting a conforming bid. They chose to play another game, and have been tossed out.

So then tell me why does Telstra pay the costs of maintenance for the wires and not the government? Well ok Telstra uses them….so then why don’t Telstra’s competitors who purchase wholesale ULL lines from Telstra pay for maintenance, testing, fault detection?

The asset was sold to telstra, pure and simple. The issue is what is a “fair and justified compensation”. Not whether Telstra owns it.

I think you need to understand something before you comment.

Telstra has did not turn on ADSL2+ because the ACCC had not guaranteed that they would not declare the service. Meaning no competitors would invest because they knew that if the ACCC did declare the service they could buy it wholesale at prices that would have been below cost. Why invest when you can spung. This is just bad regulation.

Telstra does not want to expose all her goodies to the competition why would they they shouldn’t have too, the right people in the right position know what Telstra wants to do for Australia with this NBN but it’s politicians and other marketing Media players with outside of Australia interests who continue to undermine and limit Telstra’s offering, you say Telstra is arrogant and bastardly but can you blame them considering the extra rules and regulations they are under they are there own company not Government owned any more yet all the restrictions still apply!?? Telstra makes billions of profit every year (this wont be going backwards any time soon) theres a reason for that “quality of serviceable product” and if given the ability too I am confident Telstra would become more competitive for the everyday consumer.

If Senator Conroy accepts its recommendation that a bidder other than Telstra build the network, the winner will apparently have the right to disconnect the telephone wires that run into most Australian homes and businesses and then reconnect them there to an optic fibre that bypasses Telstra’s network.

Unjust confiscation of Telstra’s property? Telstra believes so. But it has already argued that to the High Court and lost. In March, all seven judges rejected its argument in part because they believed that when the Government sold Telstra it gave it the right only to use the wires, not own them.

Telstra’s form suggests it will go to the High Court again, and much more. In the 1980s it dealt with a threat to its television signal distribution business from the Government-owned Aussat by massively expanding and competitively pricing its optic fibre links. Aussat went broke.

The article ends…

Telstra is used to winning, and has the resources to do it again.

… and yet yesterday Business Spectator pointed out:

Trujillo’s final dramatic quote to the analysts was “Nothing Stops Telstra”.

But so far, it has to be said, that whenever Telstra has taken on the government it has lost.

This will run and run.