It seems Telstra is getting beaten up by everybody these days, but I don't think it's justified. Perhaps people are forgetting that Telstra's main responsibility is to maximise shareholder returns, not to provide a network for its competitors to use!

Telstra is not the only telecommunications company in Australia. However there aren't any other companies lining up to build a network, because under the current regulatory environment the return they are able to earn is not high enough to justify their investment.

The real culprit for the telecommunications problems we now face is the Australian government. Like many state governments over the past 10-15 years, they have failed in their responsibility to provide infrastructure to Australians. With a small population spread over vast distances, the Australian telecommunications network should be a natural monopoly - it is too expensive for multiple competitors to duplicate networks.

However, the government decided to outsource the provision of this essential service to the private sector. The natural outcome of this policy is the network we see today: limited competition in areas where companies can earn a return on their investment, substandard services everywhere else and no-one willing to spend more money on a new network.

If the terms set out by the ACCC are so attractive, other companies should be willing to build a network on those terms. However in the absence of any company wanting to invest money in a new network, I think it's safe to assume that the current telecommunications policy is seriously flawed.

So perhaps we should stop bleating about Telstra - they are doing as they should in trying to maximise shareholder returns - and turn our attention to the real culprit: the telecommunications policy of the Australian government.

Of course Telstra has to make a profit - although I'd argue that the excuse-du-jour that it's responsible only to its shareholders, and that it has to maximise their returns, ignores the fact that it also has a responsibility to its customers and to the community. That's what corporate citizenship is about, isn't it? The phrase "maximising shareholder returns" seems to have replaced patriotism as the last refuge of scoundrels.

And the fact that Telstra is still majority owned by the government, as the representative of the people of Australia, seems to me to demand of it that it should should act responsibly. It shouldn't tell lies, for instance.

Telstra has for too long taken for granted that it can slug its customers with unreasonably high margins, while at the same time denying them the highest level of services. It's allergic to competition, but competition is the only thing that will force it to adapt and survive. British Telecom has managed to do that.

And yes, the government has pocketed its dividends and let Telstra get away with murder. It's completely bungled the sale process (it should have ripped the infrastructure out before selling it, which is what an expert review told the Fraser Government to do, by the way). Bleeding Edge has criticised the government, and will continue to do so. But to suggest that the community should not criticise Telstra, simply because its unfortunate shareholders would like to have some more money in their pockets, is absurd, in my opinion. Privatisation does not constitute a moral detergent.

Because of Solstra's excessive pricing I avoid their products wherever possible. My mobiles are with Virgin. My home phone and internet are billed to me be Westnet: OK, they pay Solstra for the usage of the copper, so it's me using it but once removed. I don't get a Solstra bill and as far as I care, I hope to never get another one.

I read your posts on Telstra with great interest Charles. That Telstra might have fudged the figures on the cost of fibre to the node, or even on speeding up the network in other ways does, if true, undermine much of their argument.

Nonetheless nomdeclavier still has a point, the provision of this key 21st C infrastructure was way too important to leave to a giant profit-seeking company, a regulator and some minnow competitors. Moreover one would expect a private company, facing a regulator determined to control its pricing, to be loose with the facts. This is behaviour that should be challenged and sanctioned but it is not to be surprised about.

The government has got, and continues to get, telco policy seriously wrong. The regulator is underpowered and under-resourced, and a competitive system mediated through a real market barely exists.

As for arguments about Telstra behaving like a good corporate citizen or that Telstra should act in the community interest to its shareholders detriment, just because the govt still owns over 50% of the company, these don't wash.

Telstra was privatised. It became a corporation whose first duty was to shareholders, either via proftis and dividends or by growing capital value. Everything else came, at best second and really not at all, except perhaps as PR. As was pointed out in The Corporation private companies are, in their very constitution, morally devoid psychopaths.

No-one would have bought shares in Telstra with any expectations of profit if its majority government ownership meant a community interest or nation-building component still applied. It turns out there was negative capital profit up until now anyway. Howard softened Telstra's privatisation by not selling everything off at once. But the act of privatisation destroyed Telstra's previous incarnation, the "you can't be a bit pregnant" clause applied from the first sale of shares.

As such Telstra cannot be expected to serve the nation in its present form, it can only be forced to.

For the record my earlier thoughts on the matter can be found at here