Telstra to Continue Legal Action over Wireless Broadband Contract

Australia's Telstra has confirmed it would continue legal action to force the disclosure of documents used by the former Australian Government to explain it funding of a rural wireless broadband internet project by Opel, a consortium of rival telco Optus and Elders prior to the last election.

Telstra says that the public funding of $600 million (US$529 million) was increased to $958 million (US$844 million) without public consultation - and that the extra funding is to be used to expand the project coverage to areas already serviced by commercial operators. This would result, if the claim is true - in the Australian taxpayer funding a commercial competitor to Telstra, as opposed to the project's aim which was to provide coverage to commercially unviable areas.

The Opel consortium is required to at least match the government funding from their own resources.

"Telstra first took this legal action based on the principle that governments should act transparently and be accountable when they spend taxpayers' money. We also believe that Telstra shareholders, who are also taxpayers, deserve to know how a commercial rival was given such a large taxpayer-subsidized benefit despite the existence of a competitive market in mobiles," said Dr Phil Burgess, Group Managing Director, Public Policy & Communications.

Telstra commenced the proceedings in August last year against then Minister, Senator the Hon Helen Coonan, and appealed against the Court's decision to allow the documents to be kept secret. The appeal will continue with the new Minister, Senator the Hon Stephen Conroy, as the respondent.

The move comes exactly seven months since the announcement by the then Government that it would fund the OPEL wireless broadband network for regional Australia.

"Seven months later OPEL has no management, no carrier licence, no confirmed spectrum and no settled technology platform. It is, in every sense, a phantom network offering phantom services to phantom customers," Dr Burgess said.

Posted to the site on 17th January 2008