COVER STORY: Will Telstra be fully privatised?
by News Weekly
News Weekly, April 22, 2000
The Queensland National Party's decision to oppose the full privatisation of Telstra will focus attention on the Federal Government's Telecommunications Service Inquiry. Currently, Telstra is 50.1 per cent government-owned.
The Inquiry has advertised in metropolitan and regional newspapers, seeking submissions on Telstra's service delivery.
The sale of Telstra depends on the outcome of this inquiry, which is headed by Mr Tim Besley, former head of the Commonwealth Bank, with Ray Braithwaite, a former National Party MP from Queensland, and Jane Bennett, a business woman from country Tasmania.
Public concerns reflect the fact that Telstra is widely regarded as merely a monopoly, which puts profit ahead of the public service which Telstra was originally designed to provide. The proposed cuts of at least 10,000 jobs by Telstra - many of which will come from its customer service centres located outside the metropolitan areas - will deepen this concern.
In both rural and metropolitan areas, there is a perception that Telstra's poor service and huge profits will only worsen if the corporation is privatised.
Telstra has also come under criticism from its main commercial rival, Optus - which offers limited competition in the long distance telephone market and cable TV - and government regulators, over alleged predatory pricing policies, and lack of response to customer complaints.
The Telecommunications Service Inquiry has been established to assess the adequacy of telecommunications services in metropolitan, regional, rural and remote areas.
The inquiry is required to consider the extent to which Telstra and other carriers and service providers:
* are meeting their statutory requirements under the Customer Service Guarantee (CSG) in metropolitan, regional, rural and remote areas in accordance with reasonable public expectations of service levels;
* are demonstrating ongoing improvement in their adherence to these statutory requirements in metropolitan, regional, rural and remote areas;
* have established effective processes to enhance their responsiveness to disadvantaged groups (e.g. the elderly and medical emergencies) and to minimise the occurrence of unacceptable service delays; and
* are addressing both the basic and advanced telecommunications needs of all Australians, regardless of where they live.
Under Telstra's customer service charter, Telstra guarantees to:
* keep agreed appointments in regard to either connection or repair of the telephone;
* ensure prompt connection of telephone lines; and
* prompt repair of the service (including a user's telephone and the line connecting the user to the exchange).
The Federal Government has allocated $421 million to improve Telstra's service to rural and regional Australia, as part of the "social bonus" arising from its partial privatisation.
The components of the social bonus are:
* $70 million over 5 years to enable people in rural areas to have access to services and technology that enable them to obtain information or carry out business (the types of services promised are phone, fax, postal, data transmission and Internet services. Examples of the types of transactions are commercial, banking and insurance transactions, and dealings about employment matters and with governments);
* $150 million over three years to enable carriage service providers to provide people who do not currently have access to untimed local calls with access or provide people who have only limited access to untimed local calls with extended access;
* an addition to the Regional Telecommunications Infrastructure Fund (RTIF) of $81 million;
* $120 million over five years will be expended from the Television Fund Reserve, to extend areas in which television programs broadcast by SBS can be received and enabling people to obtain reception of programs transmitted by SBS, the ABC or commercial TV stations.
It is not clear that this $421 million has led to significant improvements in services to rural areas.
Other issues likely to feature at the inquiry include:
* the high cost of telephone services in many country areas (with telephone calls often being charged at STD rates). This is a particular problem as many businesses, including government departments, now use automatic answering services and queuing of calls, to cut costs. In effect, the costs are being transferred to users;
* the loss of jobs as Telstra reduces staff in rural areas and at customer service centres;
* the implications for telecommunications of the withdrawal of other facilities (e.g., education, banking, shopping, business, hospitals and medical services).
Submissions must be made in writing by the end of May to the Telecommunications Service Inquiry Secretariat, Locked Bag 2000, Kingston, ACT, 2604.