Thursday, February 28. 2008Be Careful What You Wish For - Lest You Receive It.John Linton Sometimes I wonder if the provision of decision making positions at ISPs is actually part of some sort of Wesley Mission outreach program to give employment to the mentally handicapped. It appears that there is no situation so simple as to be beyond these people's capacity for massive error. What prompted me to make such unkind remarks (except for my deep envy of more successful ISPs and my own increasing feelings of personal inadequacy) you might ask? The answer is that I was sent a copy of the letter constructed by Melbourne law firm Herbert Geer Rundle on behalf of InterNode, iiNet, Primus, EFTel, Westnet, TSN, Wideband Networks, Network Technology, Adam Internet and Netspace sent to Graeme Samuel at the ACCC. I read it late last night and couldn't believe what I was reading so I re-read it again a few hours ago over the first caffeine hit of the day . It's always nice get the new day started with a long and sustained bout of amusement which, the contents being what they were, would have resulted in bursts of loud laughter if my long dead gran hadn't taught me that it's undignified and unkind to laugh at the mentally ill. I'm sure that this 9 page letter (which doesn't contain any strictures that I can see) forbidding its use/publication by anyone) must be readily available on the web as it was to the peson who sent it to me so I haven't reproduced it here. It's almost impossible for me what got this bunch of commercial competitors together in the first place (but, you know, I suspect some lawerly advice being the reason) but, Heavens to Betsy, Grampaw, what a farrago of frustrated and fearful little bunnies they must be. These poor people are spending major money on lawyers to demand that Telstra wholesale their ADSL2 services. ....Yes Virginia, there really is a Santa Claus (if you're Telstra). Did they give this one microgram of thought in their group hug before deciding there was no more perfect way of not only wasting large sums of their dwindling capital but the only result, whichever way it went, would totally 'screw' them? I have a friend who's convinced that Telstra have a bunch of incredibly intelligent, Nobel Laureate type, intellects hidden away constructing and implemeting the Telstra master plan aimed at restoring the Telstra monopoly. I know that can't be true because....well....I've already passed my 'unkindness to the less abled' quota this morning so I will move on. However, if there were such a group within Telstra it could explain this letter better than anything else I can think of. What can happen other than three certain things: 1) This timorous huddle of bunnies will spend a lot more money than their worst estimates over the next 9 - 24months. 2a) The ACCC will agree that Telstra must sell ADSL2 at a realistic price to Wholesale Customers which, after appeals lasting who knows how long Telstra will do. 2b) The ACCC will disagree that Telstra must sell ADSL2 at a realistic price which, after some more money on appeals by the 9 bunnies new SCs will either stand or reverse to 2a). And this means what? Apart from the given of losing a lot of money and management time on law suits either result will be the ruin of the frightened 9. Let's say that the ACCC and the High Court decide that Telstra doesn't have to wholesale it's ADSL2. Huge money losses and time losses over 12 - 24 months. Nothing changes except the nine bunnies are less a lot of cash – chalk up one for Telstra. Let’s say, now, that the worst case scenario for the timorous nine comes about and that after expensive appeals the ACCC/High Court state that Telstra must wholesale ADSL2 (something Telstra knew all along). Are the wee bunnies now better off? Like Hell they are. Chalk up an even bigger ‘1’ for Telstra. But surely, I hear you mutter, that can’t be right??? I’ll give my reasoning tomorrow (if you can be bothered reading it) showing that whatever way this goes there’s going to be rabbit for dinner Trackbacks
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The letter ...
http://www.internode.on.net/pdf/news-media/accc-telstra-adsl2plus.pdf Comment (1)
John,
If Exetel had the market position that Telstra now holds, what would you/Exetel do differently, to that which Telstra now does. I often wonder if the shoe was on the other foot, would the consumer benefit or would we be fighting another lord of darkness. Comments (3)
I would wholesale everything at the difference between what the costs of having a retail operation do it and my true cost price.
In that way I'd get the same money irrespective of whether I sold it or a wholesale customer sold it and there would be a whoe lot more sales made - just as happens in very other manufaturer that sells via both retail and wholesale. I think that model has been around for the better part of 5,000 years. Of course, I'd have split the engineering/network part of Telstra away from the retail part of Telstra in the first place and there never would have been a problem. Why on Earth aren't I running the country? Comments (4)
JL wote: "Why on Earth aren't I running the country?"
Because you're too busy trying to do something productive? Comment (1)
JL Wrote "I would wholesale everything at the difference between what the costs of having a retail operation do it and my true cost price."
Do you think that would work since the ACCC has this habit of setting the prices that Telstra can sell it's products? Do you think Telstra would sell LSS for $2.50 (Telstra wanted $15, then $9 but got $2.50) Do you think Telstra would sell ULL for $14? No they wanted $30. Comment (1)
sorry john -- a bit off topic but-
I was talking to James ( 6 months ago )about the Medowie (MWDI) Exchange ever getting adsl2 and he mentioned he had a relative living not far from me, and was wanting it too. Well yes the 900 exchange release by telstra has our exchange enabled. -- hard choice for me with a letter from telstra saying quote offer- 3288 and 12 months half price on $99.95 pm 25GB shaped on 24months contract. I choose exetel 8Mbit plan upgrade in the vain hope that telstra will allow you to be able to market adsl2+ through this exchange. John your up against a stacked deck in the ISP game -- telstra holds all the cards. good luck, if even im tempted by the dark side. Comments (3)
It would be sad to lose you as a customer.
However, as with my daughter in Medowie, there is a compelling reason to move to BigPond - and that is the way Telstra 'competes' - it simply ensures there is no competition. I'll give my reasons tomorrow as to why Telstra will 'wholesale' ADSL2 before the end of 2008 but it'll be after it has three marketing campaigns aimed at Exetel's and other ISP's customers in the '900' exchanges locking them into 24 month contracts with massive difficulties in changing after the 24 months is up. Comments (4)
I look forward to your reasoning on this.
I have always had an excellent internet service with Exetel and look forward to being with you in the future - myself and the 15 or so people I have connected to Exetel based my experience. reasons I say to people to go with Exetel - Great Price Reliable connection works well with Voip -- I use WDP havent tried exetels service. reasonable $3 per GB not the $150 excess Telstra charges. Just an observation from me - since you discovered the ISP Nirvana of Sri Lanka I get the feeling your more likely to sell Exetel and concentrate your input there - this somehow makes me uneasy. cheers Bill. Comments (3)
I've always been very grateful for your support.
I have no desire to nor intention of selling Exetel - it's my last attempt at returning something to a country that's been so good to me since I got here as a virtual child and had to find a way in life. The Sri Lankan company will allow Exetel to reduce its operational costs (already the lowest in the Australian market and therefore continue to sell its services at the lowest possible prices to its Australian users. Both countries will benefit - at least as I look at it. I have five chidren in Australia (one of them in Medowie) and my future is very clearly in this country. Comments (4)
Surely with the capital you have invested in Exetel John you could have retired more than comfortably?
I think this demonstrates your motives are additional to financial gain. I wish I could afford five children! Comment (1)
There were no 'dreams of wealth' when we started Exetel though Annette's and Steve's motivations were undoubtedy different to mine.
Financially I certainly had no need to continue to work, especially in such a back breakingly hard job as starting up a small communications company. However, we had a view of what a tiny company could do and, pretty much as we thought it through - it's done just what we had hoped for. The challenges (and I'm using a euphemism) get more difficult rather than less difficult each year but we understood that so its not something that particuarly worries us. 5 children? I agree that the financial burden is immense (for many years we struggled to meet the financial demands)but the rewards are incredilbly greater. Comments (4)
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