Aussie telco sues government communications minister

The telco alleges that it submitted a tender to set up a regional broadband network in Australia on the basis that $AU600 million would be provided by the Commonwealth to help pay for the scheme.

The winning bidders, a consortium led by Elders and Optus owners SingTel, will be awarded almost $AU1 billion dollars to complete the project, which is much more generous government contribution in anyone's language.

Telstra's grievances include not being told by the Minister why it did not win the bid, the vast increase in funding that will be provided, which, it reckons, would have changed the nature of the bid it made, and also that the Elders/Singtel plan duplicates many already-existing services.

Senator Coonan has been asked by the court to hand over all documents relating to the bid. She has hit back at the telco's move, saying that Telstra has no basis for the complaint, and that the company should "respect the umpire's decision". She went on to accuse the newly-privatised company of wasting shareholder's money.

The subtext to the squabble does provides a few clues to the reason for such sour relations between the government and its former monopoly operator. Telstra's chief executive, Sol Trujillo, has been taking pot shots at the government for months, and promising to show what the telco could do once free of the shackles of partial government ownership.

Infrastructure is at the heart of the problem. Though now a private company, Telstra still owns infrastructure that serves the entire (rather large) country. It is required to provide this infrastructure at very low prices to its direct competitors, and often maintains that infrastructure too. What this has led to is a permanent low-level warfare between the telco and its smaller competitors.

While some may point to the hasty privatisation of Telstra ten years ago as the root of the problem, the clock cannot be turned back on this, and all parties know it. Instead, the government and the telco antagonise each other, with this case the most recent of many spats. Whoever wins in court, the Australian internet user is sure to lose through delays to improved services.

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