Jock Given

It’s time for a bit of fan post about Jock Given, Swinburne’s Professor of Media and Communications.

Why a fan post? Maybe it’s his recent in-depth dissection of the Australian Government’s implementation plan for the National Broadband Network. Maybe it’s his long review essay, also in Inside Story, about the future of books and print. Maybe it’s his fine monograph of 2003, Turning Off the Television, about the history and future of Australian broadcasting and communications policy.

In fact, any way you slice it, Given’s work has become central to this field. He’s got that rare combination of incisive analysis and clear, witty prose.

Take, for example, his discussion of the National Broadband Network, one of the best short introductions to this bewilderingly complex topic you’re likely to find:

WHAT McKinsey and KPMG have delivered is the most substantial public analysis of an Australian communications infrastructure project since the domestic satellite system in the 1980s. This is a major benefit, though not necessarily a good omen. AUSSAT racked up $800 million in debt within a few years. Voluminous public documentation doesn’t always lead to great decisions.

Indeed, in Australian communications, the size of the study is generally indirectly proportional to its influence. The bulky Davidson Inquiry recommending competition in telecommunications and the multi-volume Broadcasting Tribunal inquiry recommending the introduction of cable TV, both in the early 1980s, achieved close to zero. The Productivity Commission’s year-long inquiry into broadcasting in 2000 was largely ignored. But Kim Beazley’s few-page statement about telecommunications competition in 1990 blew the industry apart. By this standard, the two-and-a-half-page media release announcing the NBN in April 2009 was bound to change the world.

The McKinsey/KPMG study is testimony to the sea-change in telecommunications policy in the last two and a half years. For twenty years, both sides of politics have been getting the government out of the telecommunications business, first by allowing private competitors to take on the state-owned monopoly that ran the country’s telecoms for ninety years, then selling down the state’s ownership of it. When new mobile and fixed-line networks were built in the 1990s and 2000s, communications ministers didn’t pour over technology choices, costs, revenues, capital allocation and geographic priorities the way Postmasters-General used to do. Parliament had decided that governments made lousy decisions about those kinds of things.

At least, they weren’t supposed to be pouring over these things the way Postmasters-General used to do. The truth was they still did quite a lot of it. The Coalition government crawled all over Telstra’s timetable for shutting down its analogue mobile phone network and applied immense pressure on its plans to build and later close a CDMA network. In his bookWired Brown Land?, Paul Fletcher, chief of staff to long-term Howard government communications minister Richard Alston and now the Liberal member for Bradfield on Sydney’s north shore, says Ziggy Switkowski was not even on the shortlist of candidates for CEO until Alston insisted he be there. This was at a time when Howard and Alston were pushing their reluctant backbench to support privatisation. The government, they said, had no business controlling a telecommunications company.

But out in the new marketplace, the cable TV and eventually broadband network built in the mid 1990s by the new wholly private telco, Optus, didn’t work very well. The still-public Telstra proved more nimble and ruthless than some expected, building a similar network down many of the same streets. Both companies had to write off billions of dollars. It seemed telcos in commercial markets, even privately owned ones, could make lousy decisions too. Optus’s subsequent caution about investment in fixed-line networks and the curiously widespread, renewed enthusiasm for monopoly is the deep legacy of that time.

The government’s response has been to get back to controlling a telecommunications company. It is not the vertically integrated Telstra, it’s the wholesale-only NBN Co. McKinsey/KPMG’s Implementation Studycontains a set of recommendations that are not yet government policy, but it tells us a great deal about this new, old world.

We have a good idea – the best yet – about how much it might cost. We have lots of data and discussion about what it might earn in revenue. We have an argument about “viability,” but this is really an argument about whether the now fairly well-articulated financial returns that can be expected from the project are justified by the economic and social benefits that might not be captured by the financial modelling.

This is where faith and politics take over.


Telecommunications: Australia’s unhappiest industry


Australian mobile phone complaints nearly doubled in the 2008-09 year

On Friday I attended the Communications Policy Research Forum at the University of Technology Sydney.

Speaking at the Forum, amongst many others, were  my old supervisor, Associate Professor Elaine Lally and my colleague at the University of Western Sydney’s Centre for Cultrual Research, Professor David  Rowe. Lally and Rowe were presenting the results of a research project about customer complaints for the Communications Alliance, the peak body for the telco industry in Australia.

The results were sobering. There were an astonishing 230,000 complaints to the national complaints body, the Telecommunications Industry Ombudsman, in 2008-09, a rise of 54% over 2007-08 figures, according to TIO data. Horror stories like this one published by the Sydney Morning Herald’s Paul Sheehan are common. So bad is the situation that a large proportion of complaints are actually about Telco complaints handling proceedures themselves. Complaints by mobile phone customers were up a staggering 78%.

Lally and Rowe’s talk detailed why. Training hours for call centre workers in the telecommunications industry are much l;ower than for industries like banking. In fact, an amazing 72% of telecommunications call centre workers leave the industry after less than a year. There’s also no prizes for guessing why there are so many complaints: maddeningly complex phone plans and byzantine corporate billing and service structures make it almost as hard for employees to understand customer issues as the customers themselves. The way phone and internet services are bundled and solved is structurally complex, to the point of being almost impenetrable.

More fundamentally, the practice of making customers wait in long phone queues for information about their service or to make a complaint is inherently frustrating. In many cases, customers are being asked to spend significant amounts of time and do significant amounts of unpaid “work” merely in order to resolve a complaint for a service they’ve already paid for. It’s not surprising customers and call centre workers often end up adversarial, angry – even traumatised.

The result is Australia’s unhappiest industry – as the TIO data shows. No wonder the Australian Competition and Consumer Commission is threatening to step in and introduce greater regulations for the sector. Consumers will be wondering why anyone expected anything else.

Australian broadband and telecommunications policy

In today’s New Matilda, I have an article up about the Rudd Government’s decision to split up Australia’s giant phone and media company, Telstra. It marks a sea-change in Australian media and telecommunications policy, for reasons that will be immediately apparent to most Australians.

For international readers of my blog, here’s a bit of background.

Telstra is one of Australia’s largest and most profitable corporations. When Australia decided to deregulate its telecommunications industry in the early 1990s, and unlike in other countries, the company was never forced to split off its wholesale infrastructure assets from its retail operations. The result was that the privatised former government monopoly remained the last “vertically integrated” telco in the western world, effectively competing as the 900 pound gorilla against new entrants to the market. In other words, Telstra not only continued to own the legacy copper wire and fibre networks around Australia, but also competed aggressively as a retailer in the phone and internet markets. Not content with that, the company also made a series of media and content plays, eventually owning half of Australia’s major cable TV company, Foxtel. For my US readers, imagine if AT&T had never been split into the Baby Bells before US telco deregulation, but instead bought a cable TV company, and you can get an idea of how powerful Telstra was and remains.

Under the management of former Qwest CEO Sol Trujillo, Telstra used that power to aggressively fight both the Australian government and competitors. The company was notorious for its anti-competitive practices, like sabotaging competing ADSL exchanges and “losing the keys” to phone cabinets that competitors needed to access. While it was at it, Telstra spent tens of millions suing the government (still a part-owner of the corporation through the unprivatised section of the government’s shareholdings). Meanwhile Telstra leveraged its sunk costs to become one of the most profitable telcos in the world.

The result has been a disaster for Australian consumers. Australia has some of the slowest broadband internet speeds and most expensive internet plans in the western world.

Yesterday’s decision by the broadband minister, Stephen Conroy, means that the giant telco will now be forced to split itself up. It’s been a cunning series of political manouvres that have completely outflanked Telstra. It also shows the way ahead for the Rudd Government, should it wish to take on the big carbon corporations who are lobbying against its proposed emissions trading scheme.

You can read the full article here.