Wednesday, April 15, 2009

Janet Albrechtsen, Paul Kerin, Ruddstra, Broadband with TruCoat and every eucalypt connected

(Above: broadband with TruCoat).

Only a childish lawyer with a childish fixation on the law would think you could score a point against a politician by chiding them for breaking corporate law by pitching wild ideas to the public.

Cue Janet Albrechtsen in Rudd flouts rules with market play:

A disappointing thing happened last week. A couple of unlicensed share spruikers went on television imploring Australian mums and dads to invest in a company yet to be formed, with no business case, no feasibility study and whose viability is extremely doubtful.

The same guys paid no attention to the financial needs or risk profiles of their audience but simply asserted this was an investment not to be missed. They probably broke three or four critical sections of the Corporations Act, some of them carrying jail terms. Just the sort of corporate cowboys that our Prime Minister has condemned in his moral sermons about corporate excess.

The names of these chaps? Kevin Rudd, Wayne Swan and Lindsay Tanner, all talking about the company that will run their national broadband project.

Lucky for them they can probably hide behind Crown immunity and other technical defences to justify ignoring the corporate standards set down in our laws.

Well on that score there wouldn't be a politician in the game who's not as guilty as hell, not least John Howard for selling off those Telstra shares to an unsuspecting public, the poor mugs not realizing they were being sold a flea bitten pup, run by monopoly-minded loons without a clue about operating a business in real world conditions.

We occasionally look at our Telstra shares and wonder how we could have been so easily duped. Unfortunately they don't bother with printed shares these days, because with a bit of wallpaper paste, they'd make a great feature wall. Still, maybe not as striking as a wall of Qantas shares, which we got rid of before Geoff Dixon had his way with the airline (though thank the lord he didn't get his ultimate way, putting it into private debt burden which would have surely guaranteed bankruptcy and a first class kerfuffle).

Anyhoo, Albrechtsen has a fine old time regurgitating the Ruddster's attacks on capitalism, and unregulated shonky share salesmen, and the spirit and the letter of the law, comparing Lindsay Tanner, Wayne Swan and the Ruddster to Storm financial advisers.

Janet delivers up some mighty fine sections of the Corporations Act, including section 726, section 734, section 769C, and section 1041H, which really worked tremendously well in the case of Storm and should work tremendously well when applied to the hijinks surrounding Macquarie Bank and BrisCon (and what a fine name that is, how apt, how magical, and so much better than BrisConnections).

Poor Janet gets very upset about the way Rudd has presented the broadband proposal as my way or the highway, and worries about being tagged a luddite, the same way as keen rational minds debating the government's climate policies are climate change deniers or green extremists (yep, I bet that's the first time deniers and greenie extremists shared the same sentence, until they got together in the senate committee).

Where, she moans, are all the intellectually sceptical media hacks when you need them the most. And it's true the Murdoch press was strangely welcoming, even warmly embracing of the proposal when it first hit the news. The Australian gushed, while you could find this sort of guff in the provincial papers, like The Advertiser, which clearly knew no better:

Some will say the Government should not spend billions of dollars of taxpayers' money on the project.

However, the economic rationale is compelling.

Just as Australia needed to build the Overland Telegraph, the Snowy River Hydro Scheme and a network of national highways, we need high-speed broadband. It is one of the building blocks of future prosperity.

Creating a wholesale provider of the network should engender greater competition between retail telecommunication companies.

Telstra - understandably acting in its own interests - has done whatever it can to strangle competitors from using its network. This has led to a regime of inadequate service and continual complaints.

On its own, the wholesale company should generate steady revenue as a direct return for the taxpayer dollar.

Lordy, a Murdoch rag spruiking for the tin men, the aluminium siding sellers, and clearly in breach of so many sections of the Corporations Act we don't have the time or the space to list them here.

All Janet can do is wonder and worry. Will Australians pay a hundred and fifty to two hundred a month, a figure that hasn't been costed, apart from a bit of scribbling on the back of an envelope, but never no mind, if Rudd can do it, so can everybody else. Or will we prefer to pay half that for a 50 mbps service from Telstra? But what if Telstra joins in the proposal? Or will it all be a white elephant?

In other words, where is Australia’s P.J. O’Rourke? The renowned American political writer, who will be in Australia next week, would have a field day poking holes into the hazy $43billion broadband proposal being flogged to mum and dad investors by Rudd. He would remind us, no doubt, of his basic law about politicians: namely that giving money and power to government is like giving whiskey and car keys to teenage boys.

Indeed and giving John Howard the keys to the government privatization cupboard, selling off Telstra with a fine flourish. As a result, that misbegotten, ill-conceived, half-assed, half-baked grab for cash, managed to stuff broadband in this country, as it failed to sort out the difference between retail activities and structural assets necessary for competition in the retail arena. Yep, in one quick bout of shortsightedness and ineptitude, it's what's landed us in this godforsaken broadband mess, and now held back for a decade by government stupidity and inaction.

But let's not brood about the past. Let's just be luddites spreading FUD about the value of broadband, so we can keep flying to conferences about Ian Plimer's views on climate change rather than using live streaming, without drop outs, synching problems or looking at a postage stamp in the corner of the computer.

Speaking of which, The Australian isn't content with just running Janet on the issue, but also runs Paul Kerin rabbiting on about The broadband betrayal.

Kerin's terribly upset about Rudd not having based his announcement on serious cost-benefit analysis and breaking his own vital guidelines.

Now everything Kerin argues is - unlike Albrechtsen - true, and fair, and an accurate assessment of the business skills applied by the government to the broadband issue, and also rather beside the point. 

Well I guess there'll always be the world of academics and then the real world of politics. The government was always going to get stitched up because of having a dummy like Conroy in the communications chair, and supervising a flawed tender process that - if rewarded to one party or another - would have seen Telstra head off to the courts to shake down the government for access to its copper wiring (wiring that really should be seen as useless in terms of a wired nation).

The expert panel evaluating the tender thought this was clearly the go, and Telstra, behaving like the ratbags they've been ever since being privatised, were chomping at the bit for some spoiler action, with Conroy worried compensation might get over the 20 billion mark.

But that risk exists because of past government failure to separate Telstra's network and retail businesses pre-privatisation, notes Kerin.

Well yes old bean and that's why the government was between a rock and a hard place, having announced a broadband vision, having embarked on a dud tender for a system that was a dud in the first place, and then having to somehow keep the vision alive in the face of Telstra's recalcitrance.

Kerin gets terribly upset about Rudd now offering to conduct an implementation study that will produce a business case by year's end, on the basis that the government will not produce a business case that doesn't stack up and would therefore make it look silly. 

But here's how sky in the pie politics works, just as it worked for the Howard government in their decision to throw ten billion at a water plan with only the foggiest notion of how to implement it. First Rudd has taken the heat off Conroy for his dead in the water filter plan, second he offers up an even greater vision for the country (not just aluminium sidings, but with bonus Trucoat), and third he delays all the crucial bits of business so the team can sit down and bash out a deal with Telstra, which had petulantly sat out the tender process and thereby made it next to useless.

It's fun to see the right wing commentariat and earnest professorial fellows get indignant about this bit of head kicking by the bovver boys, but in the end if we get a more rational policy and better broadband out of the process, well then whoopy doo. The way Conroy was heading, we wouldn't have been down the tube, we would have been out of the tube altogether. As it is, we're now looking at an arduous process of ad hoc implementation, but at least the Telstra log jam has been broken.

Would I buy shares in it? Well I bought shares in Telstra! Am I a loon? Say no more.

It reminds me of my favorite negotiation in one of my favorite movies Fargo:

Customer: We sat here right in this room and went over this and over this!
Jerry: Yeah, but that TruCoat ...
Customer: I sat right here and said I didn't want no TruCoat!
Jerry: Yeah, but I'm sayin', that TruCoat, you don't get it and you get oxidization problems. It'll cost you a heck of lot more'n five hundred...
Customer: You're sittin' here, you're talkin' in circles! You're talkin' like we didn't go over this already!
Jerry: Yeah, but this TruCoat...
Customer: We had us a deal here for nine-teen-five. You sat there and darned if you didn't tell me you'd get this car, these options, without the sealant, for nine-teen-five!
Jerry: All right, I'm not sayin' I didn't...
Customer: You called me twenty minutes ago and said you had it! Ready to make delivery, ya says! Come on down and get it! And here ya are and you're wastin' my time and you're wastin' my wife's time and I'm payin' nineteen-five for this vehicle here!
Jerry: All right. I'll talk to my boss. See, they install that TruCoat at the factory, there's nothin' we can do, but I'll talk to my boss.
[Jerry leaves the room]
Customer: [to his wife] These guys here--these guys! It's always the same! It's always more!
[Jerry in the other room talking to fellow salesman]
Jerry: You goin' to the Gophers on Sunday?
Salesman: Oh you betcha.
Jerry: You wouldn't happen to have an extra ticket?
Salesman: You kiddin'!
[Jerry returns to his office]
Jerry: Well, he never done this before. But seeing as it's special circumstances and all, he says I can knock a hundred dollars off that Trucoat.
Customer: One hundred ... you lied to me, Mr Lundegaard. You're a bald-faced liar. A fucking liar.
Customer's Wife: Bucky, please.
Customer: Where's my god damn check book? Let's get this over with.

As always, the best last word is left to First Dog on the Moon, available in full form at Crikey:

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