From
http://canberra.yourguide.com.au/detail.asp?story_id=1067618

The Federal Government's war on Telstra is quite irrational. The Government
has driven the market value of Telstra shares down from $7 to just under
$4.50. It has taken decisions which advantage Telstra's overseas competitors
at Telstra's expense. It puts forward arguments that are disingenuous.
Now, on November 13 and 14, right in the middle of an election campaign,
Telstra's challenge to the constitutionality of one government action is to
go before the full bench of the High Court.

Telstra, created out of government instrumentalities by the Hawke Labor
government along lines dictated to it by the telecom unions, was sold to the
public in three tranches, one of which was at $7.

Telstra has 10million customers. More to the point, it has 1.5million
shareholders who will be voting in the federal election soon. The
Government's fervent wish must be that they are voting with the loyalties
that prompted them to take up successive offers, and not with their bruised
hip pockets.

The Government brought in a team of Americans to run the new, commercial,
Telstra after the last float, a team which set out to do exactly that, but
found it could not, because Telstra was bound by regulations administered by
the Australian Competition and Consumer Commission.

The ACCC sets the price at which Telstra must make its lines available to
Optus (Singapore), Vodafone (British) and Hutchisons (Hong Kong) which
amount to a subsidy by Telstra shareholders to its rivals.

But the greatest atrocity has been to award Opel, a syndicate formed by
Singtel Optus and Elders, the contract to build a network for rural and
regional customers who are not adequately served.

Communications Minister Helen Coonan said the Opel Network would extend
high-speed broadband coverage to 99 per cent of the population. The decision
involved giving Opel $1billion to build this network. It's not a big
extension for $1billion, according to Telstra, which already provides
wireless broadband to 98.8 per cent of the population. What would an
extension towards 99 per cent amount to: 0.01, or the whole hog, 0.02, for
$1 billion? The whole hog would be three small Queensland towns that receive
Opel coverage but do not already receive Telstra's Next G wireless or ADSL
coverage.

The Government is paying Singtel/Optus/Opel close to $1billion to build this
network. Most of the funding is being used not for services to remote parts
of Australia but for alternative services to profitable and well-serviced
centres of high population.

The program provides for provision of 15,000km of transmission. But a hard
look at the proposal indicates that, of this 15,000km of new transmission,
10,300km will be existing Optus transmission, and 2300km will be leased from
other providers. The new build looks to be down to 2400km.

In the aftermath of the deal, Singtel bought into Pakistan's mobile
telephone operation.

Telstra's own plan is for a high-speed broadband network (24megabits to
50Mbps) to homes and businesses in Sydney, Melbourne, Brisbane, Adelaide,
Perth and the Gold Coast, costing $4.1billion, and funded by Telstra from
its own resources.

The High Court action is over the Government's refusal to pay compensation
for the compulsory acquisition of the last 1.6km of copper to a customer's
premises. Telstra is asking for just terms.

In all probability there would be no problem with generating artificial
competition at the expense of Telstra shareholders if the then finance
minister in the Labor government, Kim Beazley, had corporatised the domestic
telecommunications service and the overseas telecommunications service
separately, and then allowed them to develop as equal and competitive
entities. But he didn't, because of trade-union pressure.