There is a queasy feeling in the telecommunications industry that the federal government might be about to do a deal with Telstra on regulation of broadband — crumbling to the telco’s extraordinary campaign.

Anything to blunt the impact of Labor’s broadband policy, and anything to stop the mail-outs with every Telstra bill condemning the Government’s record.

It seems clear that we can expect some response from the Government to Labor’s broadband policy within the next week — but whether it will be substance or window dressing remains to be seen. Meanwhile, Labor’s plan lacks crucial detail.

If the Government — or Labor — give in to Telstra on regulation it will set an appalling precedent, meaning that any big company prepared to conduct a slick and aggressive political campaign can, in an election year, bend public policy to its advantage.

Given that neither Labor nor the Government have yet announced the detail on their approach to regulation, it is very hard to know what the outcomes are likely to be. Labor talks vaguely of relaxing regulations, and the Government has also said it will review regulatory settings after 2009.

There may well be a case for different regulatory settings, but there is a sick feeling in the industry that this will be done for political reasons, not after due process. See the discussion among the industry-savvy, though anonymous, bloggers on the Whirlpool site to see what I mean.

This story in the Sydney Morning Herald today suggests that Telstra believes Graeme Samuel of the Australian Competition and Consumer Commission is the main barrier to getting what it wants, and that Communications Minister Helen Coonan is weakening.

Telstra’s chief spin doctor, Phil Burgess, is quoted as saying he had received indications the Government had “more sensitivities to these issues” than the ACCC, “but the regulator holds more of the cards and so far the Government has not been willing to provide the policy guidelines that are needed.”

One can only hope that Samuel holds firm for proper process rather than quick political fixes.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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