The Guardian 31 August, 2005
Telstra sell-off soon, media sell-out next
Bob Briton
The details of the package for the sale of the government’s remaining 51 per cent of Telstra are still to be finalised but it is now clear that the fateful step will be taken very soon. Communications Minister Helen Coonan says the legislation will be before the parliament in early September. It will no doubt contain a number of stop-gap regulations to try to dampen the strong disapproval of the Australian people to the loss of the asset which, until a few weeks ago, was valued at over $30 billion.
However, despite the opposition of over 70 per cent of Australians to the Telstra sell-off, the busy minister will be moving quickly to the next unpopular task being set by the government’s corporate masters — the scrapping of cross-media and foreign ownership laws and other major changes to the media.
Predictably, the opposition of newly-elected Queensland Senator Barnaby Joyce to the Telstra sale has collapsed. Deputy Prime Minister and National Party leader Mark Vaile met recently with the party’s Queensland management committee to work out how to minimise the damage caused by errant member Joyce’s previous statements. "If we go ahead with this proposal, and I certainly expect that we will, then it’s going to be up to all of us to get out and make sure that all Australians understand how important this is", hobby-farmer Vaile told the media.
Rural and regional Australia in particular will suffer from this decision. The $3.1 billion "rural communications plan" being proposed to assist localities likely to be neglected by the private telcos is viewed by most experts as grossly inadequate. Coonan is talking tough about the arrangements to rural groups: "No sale, no deal — that is the political reality." The Commonwealth is also seeking to force some of the cost of spreading the availability of broadband internet connection onto the states, which brought strong protests from the governments of NSW and Victoria.
At a National Press Club luncheon last week, Finance Minister Nick Minchin was making light of the looming downgrading of services for people living in more isolated parts of Australia. "A faulty phone box in Kalgoorlie, a mobile-phone black spot in Birdsville or the quality of broadband services in Innamincka are not reasons to retain government majority ownership of the phone company", he quipped.
Minchin also said that the new Telstra legislation will uphold a number of pledges made by the Howard government in 1996. The Telstra chairman and the majority of its board members must be Australians. Two board members must (somehow) represent the bush. Company headquarters must stay in Australia. Foreign ownership will be limited to 35 per cent despite the recommendations of a government scoping study that this be lifted to 49 per cent. An individual or corporation is limited to a maximum five per cent shareholding in the corporation.
Of course, finding board members committed to the corporate agenda has already proven an easy hurdle to clear and the other restrictions are the next, inevitable short term targets for the deregulating, privatising federal government. In the campaign to rob the people of their assets, the important thing, always, is to get another foot in the door.
Corporate unanimity
The full Telstra sale focuses attention on yet another piece of unfinished neo-liberal business — the scrapping of Australia’s current cross-media and foreign ownership laws. Telstra is a media owner in its own right, courtesy of its helpful (to News Limited) half share of Foxtel. It has toyed with the idea of merging its White and Yellow Pages subsidiary with newspaper group Fairfax Holdings.
The push is now on to have the federal government fast track its promised further opening up of our media markets to local and foreign monopolists. The current regulations prevent moguls controlling more than one of the three major media — television, radio and newspapers — in a single market. The limitation was put in place because of public concern that a media operator could dominate political debate in a locality. Laws preventing large shareholdings by foreign media operators had their origins in the determination of the Australian people to preserve their own cultural identity.
These aspirations mean nothing in the corporate world. Even Kerry Stokes’ struggling Seven Network — the smallest of the private TV outfits and likely takeover target — is in favour of scrapping cross-media and foreign ownership restrictions. "They are terribly outdated and the world has moved on", CEO David Leckie told The Australian Financial Review. Kerry Packer is reported to have had meetings with Fairfax chairman Dean Wills to talk about the post-deregulation landscape and the possibility of merging into a huge media powerhouse. Rupert Murdoch is thinking about acquiring a free-to-air television network.
The media barons are bitterly divided about other aspects of media regulation. News Limited wants to dismantle legislation that guarantees the free-to-air channels some access to sporting telecast rights, for example. Whatever happens in the months and years to come, no matter who "wins" and who "loses" the predatory battles that loom, the rich will get richer out of the fortunes that change hands and, as AFR correspondent Pamela Williams noted, "… in the end it will all come down to what Rupert and Kerry want".
Communications Minister Coonan has promised to have the sought-after legislation ready by the end of the year. If effective opposition to these plans is not organised, the privatisation of the ABC and SBS could be next on the list.