There’s more than just weird traffic and endearing accents when you get off the plane in Sydney from the USA. Australia has a telecoms environment more like those in Europe than in the USA. Nationally owned telecom carriers are completely unknown to Americans. Sol Trujillo is apparently among those Americans who don’t quite understand Telstra’s legal positioning as an essential service, so far operated by the Australian Government.
Since Alexander Graham Bell first cooked up telephony by wire, "The Telephone Company" as known to Americans has always been privately owned, though ultimately regulated by the Federal Communications Commission (FCC). The American Telephone and Telegraph (AT&T) Company became the parent company for a number of state or regional level telephone service providers i.e. New York Bell Telephone Co., Ohio Bell, etc. In rural areas with low numbers of customers per wire-mile, other companies which could suffer the lower profits, like General Telephone and Electric (GTE), provided the local service and copper wire, but were ultimately connected to the rest of the world through AT&T. AT&T held a legal monopoly on telecoms in the most populous areas of the USA.
The net effect was a top-heavy, bureaucratic and expensive telephone system with a reputation for indifference to customer complaints. Comic Lily Tomlin made a career out of lampooning "The Phone Company" in her character on Rowan & Martin’s Laugh-In show as a snide, spiteful telephone operator. More than a few people saw the connection between the 1984 AT&T logo and George Lucas’ Death Star from his 1977 Star Wars film.
When I was a kid, the telephone was hardwired into a connector box on the wall. Telephones were marked "Made by Western Electric," which was AT&T’s own telephony equipment manufacturing company. They were also marked "Property Of Bell System." They stayed with the house if you moved. No one could own their own telephone. If you wanted the phone in another room, the "Telephone Man" came out to move the wiring and the phone (at a price!).
In 1984, the US Department of Justice decided to break up the functional AT&T monopoly into eight ‘Baby Bell’ telcos. Consumers suddenly found they could select their own long-distance carrier but many lamented the simplicity of calling one place to organise all telephone services including repair. By 1984, the population of the US had grown to the point that even in formerly fully rural areas, there were enough customers per wire-mile that many smaller companies could be profitable.
The Baby Bells also found themselves for the first time in direct competition with other companies, notably MCI (later known as MCI Worldcom, the subject of a $US180 billion collapse due to fraud after the ‘2001 dot com crash’) and Sprint. When wireless technologies became popular and profitable in the USA, quite a myriad of small companies sprang up, some with bases in the old Baby Bells, which now provide local as well as long-distance services.
Australia’s telecom system initially was a mimic of that in the UK, where the Australian Post Office by way of the Postmaster General, had control of telephony services. You still see old underground telephone service lids marked "PMG." Telephony was considered such an essential service that it had to be under the control of the Australian government.
Australia has almost the same geographic area as the ‘lower 48’ or continental United States, but only has about 20 million people; the USA surpassed 20 million around 1845. It would be almost impossible for an Australian telco to make a profit with so few people per wire-mile, despite the profitability of the capital city markets.
Trujillo quickly worked out that part of the equation, but made the mistake of actually saying in public that Telstra would never be able to financially meet its Universal Service Obligation, a unique feature of the Australian telecoms market designed to assure telephone services to the sparsely populated middle of Australia. Sol’s essentially been asked to turn Telstra into a profitable telecoms player, ready for sale into a free, global telecoms market whilst carrying the USO on its back. Even if sold to a private owner, Telstra will have to remain subsidised (and heavily regulated) by the government to provide services to rural Australia, services which are already rather obviously inadequate, even in city areas.
Sol will be figuring right about now that he’s up to his shoulders in shit.
Are we taking bets on how long it will take before Trujillo calls Telstra a lost cause, packs up & heads back stateside?
I don’t think I’ll offer any specific prognostications on Trujillo’s future, but I will hazard a guess that IF Telstra is sold, it will bring very bottom dollar. The Australian government will not only lose the recurring income it currently earns from Telstra but will find it to be a financial quagmire once the proceeds from the sale are spent down. If bush telephone services are already bad, they’re certainly not going to get any better by fully privatising Telstra.
-weez
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Didn’t anyone else see ABC Insiders last Sunday? Poor Sol ended up doing a photo op in a cattle yard… where in the background, there was a bloke wearing an Akubra and a shoulder-length glove, reaching into a rearward orifice of a cow.
I’d kill for vidcaps. 😀
Comment by weezil 08.08.05 @ 9:31 amIt’s bloody insane. I remember the “good ol’ days” of the dial faced telephone and the Telecom bill. TC’s has come along way technically but still lousy customer service wise. They still treat us as though we are stupid and profit from it accordingly.
Comment by Ray 08.08.05 @ 9:59 pmLeave a comment
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