Every night television is flooded with ads for Telecom and Optus, part of the $150 million advertising war between the two telecommunications giants. Will all the hoopla lead to a better telecommunications system? Green Left asked Col Cooper, NSW secretary of the Communications Workers Union, about this and other vital issues facing his union. The interviewer is Peggy Trompf.
The introduction of Optus is intended to destroy Telecom's monopoly and force it to "lift its game". How does the CWU view this policy?
It should be understood that the introduction of the second carrier, Optus, was achieved by establishing a regulatory regime strongly biased against Telecom. Some examples:
- Telecom is no longer able to link new users to the network at below cost — as it used to do and as telephone companies have always done. That would be "unfair competition" against Optus.
- Telecom is obliged to allow Optus to use its infrastructure and can charge Optus only at a rate that covers the immediate cost of equipment usage. It's like telling a taxi driver the passengers can be charged only the cost of the petrol.
- Telecom provides a subsidy to Optus when it uses the Telecom network for access to its services. The union has called for an end to this subsidy because Optus can offer cheaper services than Telecom simply because Telecom has to provide these services to Optus below cost. In any other area of business, this would be considered a scandal of mammoth proportions.
So there isn't "fair competition", and although the long-term effects of deregulation are yet to emerge, country customers are already paying more for STD services compared to inter-capital city rates. This is called "de-averaging", and the union strongly warned the politicians and the community that
it would be a product of any competition. It's only a matter of time before timed local calls and charges for directory assistance are back on the agenda.
Moreover, any lower STD prices at the moment are not a result of competition but of the introduction of new technology like fibre optics and cheaper switching and transmission equipment, a trend the union predicted would have taken place over the next few years anyway.
In fact, this trend will be less now that we have "competition". The costs of advertising and the duplication of networks plus the repatriation of profits to foreign investors puts a limit on the amount of development that would have allowed cheaper and better services.
So what's the union's position on the Telecom-Optus ballot?
The ballot is strongly opposed by the CWU. We're calling on people not to vote. It's merely another device to give Optus an unfair advantage, as people will receive by direct mail a ballot paper requesting that they nominate either Optus or Telecom for all their long distance services. There is no precedent for a competitor being given such access to another's market for the specific purpose of taking their customers.
The government has clearly promised Optus a certain share of the profitable side of Telecom's operations in the STD and international network. It's nonsense for management to tell Telecom workers they have to be more efficient to prevent customers moving to Optus when the Department of Communications bureaucrats will not rest until Optus has been delivered at least 20% of Telecom's current revenue.
Unfortunately, the total cost of this exercise, estimated at some $300 million before the balloting process is concluded, will be borne eventually by the community and telecommunications users.
It's not surprising that recent surveys are indicating public disquiet with the whole process. Even business must realise that they will bear a significant part of this cost. There is a great deal of internal disquiet
over the support for the ballot by the senior management and board of Telecom. Many middle managers privately support our stand.
The whole business will eventually cost lots of Telecom workers their jobs. Many more jobs will go in the manufacturing industry because Telecom will abandon its preference for Australian products, including a vast amount of its telecommunications switching and transmission equipment.
At the last federal election the CWU was given assurances from the Labor government that Telecom would not be privatised. Already we are seeing Hewson-Howard style policies creeping into the Keating agenda. Do you anticipate a move to privatisation, especially in light of the budget deficit? If it occurs, how would the CWU react?
We hear stories that the very first Keating cabinet meeting after the poll considered some form of privatisation of Telecom. Although since then we have had no further indications, we know there are strong pressures within Canberra to bring some form of privatisation onto the agenda. I anticipate there will be an attempt to sell the view that Telecom would be better off because we would be relieved of government policy restrictions and interference.
Some right-wing officials in the union have already subtly been making suggestions like that. But I'm confident that the rank and file won't fall for it, because we only need to tell the story of the dire impact of privatisation on New Zealand Telecom.
Certainly Telecom is the main event for privatisation. The privatisation of Qantas and Australian Airlines involved only hundreds of millions of dollars. With Telecom the figure is somewhere between 13 and 20 billion, depending on which politician you listen to. So there's no doubt that significant forces will be brought to bear to gain public support for a privatised Telecom.
Now, in my dealings with the issue over the last 12 years, I'm confident we can stop privatisation as long as we keep public support for the concept of a publicly owned telecommunications service. That
support would be on the basis that Telecom is a company owned and financed by the Australian people and should not be handed over to the private sector, which would also involve large overseas interests because of the huge amounts of capital required. Also Telecom in the past has supported social needs through subsidising some services although this has waned with deregulation.
Clearly a privatised Telecom would aim solely for profit. The whole concept of publicly owned enterprise would need to become a major debate within the community. That debate really needs to be rekindled in a more positive way than the anti-privatisation debates in the past two years or so. Hopefully a move to privatise Telecom could be turned back against the privateers through vigorous debate on the advantages of a publicly owned enterprise like Telecom.
In July 1992 the CWU ran a campaign to save 5000 jobs threatened by the new Telecom regime. Given the rate of technological change and the push for bigger profits, is it possible for a single union, even one as significant as the CWU, to have an impact on unemployment levels?
I believe that the CWU was able to reduce the number of actual redundancies from Telecom as a direct result of the campaign. It also restrained Telecom from implementing contract and casual work as against maintaining the permanently employed Telecom staff. The union wasn't successful in preventing all redundancies, but there was more at stake than that.
We were also able to re-establish more firmly our right to be part of negotiations on reorganisation and restructuring. This had been our traditional role since the major technology disputes in the mid-1970s, but has been undermined in recent years. It's a continuing battle, and it hasn't stopped management's ambitions. We've had continuing industrial activity since that time to limit Telecom's overall strategy.I