We’re two years from the next federal election. Will Telstra continue to be an issue all that time?

The
Government wants the legislation passed as soon as possible. Three of
the Telstra bills were introduced into the House of Representatives
yesterday, but a further two – containing the protection measures to
buy off the Nationals – were delayed in the Senate.

“The case for selling Telstra is as strong as ever,” The Australian
editorialises today. “For the Government to own just over half a phone
company makes no sense, especially one which has been badly managed
while under public control.”

But who will carry the can for that
mismanagement? Will it all get sheeted home to the Government? We can
anticipate a significant delay between the passage of the sale
legislation and the actual sale of the rest of Telstra – plenty of time
for blame to accumulate.

While
polling suggests Australians oppose privatisations, they are scarcely
new and are seen as facts of life. But for a government to have an
uncompleted privatisation on its hands – particularly one of the size
and sensitivity of the Telstra sale – take us into new territory and
could create a potentially ferocious blame game.

The Australian‘s
editorial covers some ancient history. “The tragedy for the present
players is that the farce is not a mess entirely of their making. In
1992, the Labor government merged the domestic carrier, then called
Telecom, and the overseas telecommunications provider, while allowing
newcomer Optus to enter the business, supposedly to create competition.
It was a positive step away from a public service culture in
communications, of sorts. But it was also a ploy to protect the highly
unionised workforce while pretending to encourage competition. As The
Australian warned in November 1991, the refusal of US telcos to bid for
the licence Optus won ‘may have reflected a judgement that Telecom was
too well entrenched’. Sound familiar?”

Remember “megacom”? And remember the communications minister behind it? Kim Beazley.

Technology commentator Stewart Fisk
has written: “I particularly relish memories of the announcement in
December 1990 by Communications Minister Beazley that a merged Telecom
and OTC (Megacom) was necessary for Australia to have an international
player in telecommunications to compete with the Americans. The
government promised this would bring billions of dollars into Australia
each year; we were to become the telecommunications hub of Asia.”

Another industry figure, Terry Cutler, wrote in BRW back
in 2001 “I must shoulder part of the blame because of the 1990
‘megacom’ competition model I promoted in the face of fierce opposition
from Paul Keating who was advocating a structural break-up of monopoly
more along the lines of the United States. The creation of a national
flagship operator in Telstra was a good result for my then employer,
and it did enable the then Labor Government to win a hard fought battle
with the unions over the very introduction of competition. But we are
now all paying a high price in uneven access to new services,
particularly in regional Australia, bottlenecks to Internet networking
and broadband rollout, and declining reinvestment in infrastructure.”

What did Paul Keating have to say about Beazley at this time? Look up John Lyons’s Bulletinyarn
from last month: “There are four dinosaurs in Australia – Qantas,
Australia Post, the ABC and Kim Beazley – and the fourth dinosaur is in
charge of the other three.”

It hasn’t been a good week for the Government. The Prime Minister was wobbly on the 7:30 Report
last night. Yet surely they can sheet the blame for Telstra’s current
situation back to a man who never quite seems to have understood
competition and preferred big monopolies – Kim Beazley.