Australian Internet a Disgrace, Thanks Telstra!

“When you look at world travelers or global citizens such as Rupert Murdoch, who two weeks ago said access to high-speed broadband was a disgrace and that we’re being left behind and will pay for it-from me, you will find no argument,” said Sol Trujillo, CEO of Telstra (ASX: TLS), yesterday, bellyaching about Internet regulation in Australia.

There are worse places to be left behind, is our first reaction. Our second is that having a third-world telecommunications infrastructure is disgraceful, embarrassing, bad for business, and definitely not cool. Trujillo’s complaint is that the current regulatory regime would require Telstra to spend its own capital to build a high-speed broadband network. But then, by law, it would be required to share that network with its competitors at below market rental rates.

In what other business are you required to subsidize your competition? Trujillo would like the rules changed so that Telstra’s competitors have to pay more for access to networks that Telstra builds. “If you create the right kinds of incentives, customers get served; if you create bad policy or inefficient policy, you start creating limitations.”

If you create a legal monopoly, we ad, the customer usually gets screwed. Telstra has no incentive to improve its network or its customer service because it enjoys a government-sponsored stranglehold on the backbone of the broad-band network. Until that changes, we will all be forced to wait longer that we should have to watch pirated television programming on YouTube. What a disgrace.

Dan Denning

Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.

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