Speaking on Melbourne's Radio 3AW on Friday 26 November, Prime Minister John Howard told his listeners that Telstra customers were doomed to suffer problems with their phone and Internet services no matter who owned the company¹.

In the same interview, Mr Howard also said the sale would only go ahead if certain benchmarks on service standards were met, which, presumably, means when services in the bush are 'up to scratch'. So, the overall message that John Howard was trying to convey to his listeners is not altogether clear.

That privatisation won't solve Telstra's problems is hardly news to the majority of Australians who remain opposed to the sale. Nevertheless, we are entitled to ask: why bother?

John Howard then went on state what we must take to be his current 'case' as to why the Australian public must accept a second rate privatised telecommunications service. It amounted to this:

1. "I don't think you will ever eliminate all problems with service delivery by Telstra whether it is owned 50 per cent by the government or 100 per cent owned by the public.",
2. "... was it better years ago when it was fully owned by the government? It was much worse."

He also pointed out to any listeners, not yet aware of the fact, that "No company will be 100 per cent perfect." What conclusion followed from this statement of the obvious was not explained.

Presumably, he was meaning to imply that objection to privatisation on the grounds that a privatised Telstra would not be '100% perfect' was unreasonable. But this 'argument' could just as easily turned around in favour of public ownership if we were to say "no Government owned organisation will be 100% perfect."

The first of Mr Howard's arguments is a self-fulfilling prophecy. His Government, through all of its eight years in power, has been committed to handing over control and ownership of Telstra to private investors as the only plank of its telecommunications policy platform. When, unsurprisingly, the standards of Telstra's service have suffered, this is held up as 'proof' that Governments are not capable of running a telecommunications service as efficiently as the private sector.

As Senator Kate Lundy, put it in a speech on 27 October 2003:

... it is the Howard government's blinkered, backward, stunted and conflicted handling of telecommunications policy - characterised by an unwillingness to see beyond the ideological privatisation agenda and the derivative attempts to bribe the electorate with the takings of those sales - that has led to an inability to articulate a vision for how advanced broadband communication infrastructure will underpin social cohesion and economic expansion across all regions in Australia. It is this ideological agenda that has consumed the Howard government. Achieving privatisation is the only consideration ...

Regarding the PM's claim that Telstra, when fully owned by the Government, was 'worse' than it is today, we ask: why should it be otherwise, given the revolution in communications technology which has continued throughout this period?

However, whilst users in larger cities have had some access to the benefits of the new technologies, many rural users have missed out altogether because of staff reductions and underinvestment in Telstra's network infrastructure. This has been driven by Telstra's investor dictated imperative to increase its share value. In the current Australian telecommunications market, it is difficult to do this other other than by cutting costs.

As a result, earlier this year, Telstra's rural network was characterised as a "schemozzle"², by Dick Estens, who chaired the Regional Telecommunications Inquiry (RTI) in 2002. This is exemplified by Telstra's practice, in many rural areas, of placing copper cable connections above ground, covered by plastic bags, to prevent underground water from penetrating their defective protective plastic shielding.

In 1996 Telstra clearly had serious problems, but this had nothing to do with the fact that it was fully owned by the Government. Rather, its problems were caused by the misguided policies of deregulation and an inappropriate corporate charter which required Telstra to maximise its profitability regardless of all other broader considerations.

Whilst Liberal and National politicians made much of Telstra's consequent appalling treatment of many of its customers, they only compounded the problem when they commenced the process of privatisation.

As I wrote in a letter to newspaper editors on 26 November, "if (the) Government, as Telstra's controlling stakeholder, had the political will to provide us with a 21st century telecommunications network, it could do so." However, in this interview John Howard has all but admitted that his government lacks any such will.

It's unfortunate for the Australian public that this fact had not been made more apparent to them before 9 October.