In what may be her last major interview in the term of the current government, Communications Minister Helen Coonan has given her most revealing take yet on the challenges she has faced in the ministerial chair.

In a extensive interview conducted in Sydney with Communications Day chief editor Tim Marshall, Coonan says her government’s regulatory regime over Telstra was the best available option given the “scrambled egg” she inherited but also flags extensive regulatory reforms designed to give longer-term price certainty if she is re-elected.

She also dismisses suggestions that her Broadband Connect policies were a reaction to Labor’s FTTN plans and says Labor’s policy solutions for the sector are excessively simplistic.

Tim Marshall: Minister, your portfolio has been elevated to mainstream news status since you took over in mid-2004. Broadband is a major player in the election campaign. How have you enjoyed the ride?

Helen Coonan: The rise of interest has been great because it gives you the opportunity to debate something that is enabling. The thing I like about the portfolio is that no one really has given you a script. It’s all out there and no one really knows precisely where it’s going to go. I’ve found it fascinating to be in the position to be able to develop some of the themes and issues that are really going to impact our future, not only from the point of the economy but the social glue of how we are all held together.

It’s fair to say you’ve faced some heat in your time as minister. Do you think if you had your time again you’d do anything differently?

It would be very difficult to see what you would do differently in the deck of cards and they way they are dealt to you. I didn’t have a blank piece of paper and I started with a scrambled egg and I think its very important that you try and make sure you behave in an even handed way to the industry and you focus on all the important things like competition, targeted investment and strong consumer framework otherwise you are not going to get an outcome and you don’t get knocked off your course by all the things that industry claims that are going to come up. 

A fair portion of the scramble was made under the Coalition’s watch. Are you saying there were failures? 

I don’t think that’s a fair comment. The eggs started to get scrambled with Labor and the corporatisation of Telstra and it got compounded. There is a long history of not confronting it but once you’ve started to have investment and you are in a process of privatisation you really couldn’t seriously pull the rug out and start again. You had an entity that was government owned, it was a difficult set of circumstances. 

One of the big regrets expressed by industry was that the Coalition didn’t push for the structural separation of Telstra before T3. Do you share that regret?

That’s the whole argument about the scrambled egg and the investment was made. It would have invited a fairly significant court action from the bond holders in the US I would have thought. You have to do the best with what you have got and I think we’ll end up with a telecommunications landscape that will have addressed by a side-wind the issues of competition in rural and regional Australia and the Expert Taskforce if it is around the go ahead, really should have got its head around how to provide an incentive investment that will give a proper return.

Separate to the Expert Taskforce and Opel, what kind of things are you considering to improve the industry should you retain government? Surely the regulation is a problem?

I have in mind locking in, if we are returned, instead of this endless circuit of what you do with access prices, we should confront that and lock it in over the life of the investment so that you get certainty and get it with legislation. You don’t have a two year delay while everybody appeals and carries on in the usual way.

I am making no criticism of the ACCC in any way but simply the process is not conducive of a timeframe that is anywhere close to acceptable to my way of thinking. If you don’t want to even start until 2010, that is about the right way to go to drive it back into the ACCC to set the prices. 

We will also look at the reasonable things about overbuild and those sorts of things. You have to recognise that in an area like telecommunications, competition doesn’t lift all boats. You have a disconnect if you haven’t got an incentive for investors up one end and a disconnect if people are just not getting services at another end. You’ve got to make sense of all of that without driving people off the field and not providing the most level playing field you can. Its pretty hard but that’s what you have to do.

Some of your arguments about the ACCC being complex and time consuming support the views of Telstra. As a Liberal minister in a reforming government, do you ever feel uncomfortable arguing the corner for regulation against capital owners? 

You start off as a minister in my government wanting as light touch regulation as you can. But once again you inherit, as I have inherited, a specific communications regime that is predicated on the basis that it will be looked at when competition is robust enough to withstand withdrawing it or taking it back.

We’re not there yet but I’m quite certain there will be a case where there is a case for taking a very good look at the telco specific parts of the Act with a view to lightening the regulation. 

I think we should roll back the accounting separation because I think it is redundant. I’d like to see how well operational separation works before we do anything about that. Carrier conditions are absolutely critical, witness the CDMA switch-off. If you don’t have any and it’s a totally deregulated environment you’d go back to one provider because of Telstra’s market share. You can’t have it both ways. You can’t have no separation of the network and the services in effect and at the same time not have any regulation. 

If you restructure the industry, there may be a case for a different way of regulating.

Telco and media is becoming so complex, it would seem more difficult to make policy for. There are no clear rights or wrongs just imperfect and constantly changing choices. How do you deal with that? 

The basic thing is I don’t make assumptions that there are right answers. You have to make an assessment of all the possibilities and then against some clear criteria and objectives you have to try and get the best outcome. That’s what I do.

In media for instance I said we needed a transition to release the old settings because they no longer worked and redundant – seriously they were set before the internet – but not so much so that you remove all of it because you don’t want to risk consumers not being able to view free-to-air TV and all those things. 

One claim that has been made is that the government only acted on broadband after Labor proposed its FTTN. What do you say to that? 

If anyone seriously thinks I could have come up with this Opel Network just a response to something Labor was doing, they are just wrong. It was in the pipeline months before, in fact eight months beforehand.

I recognised as soon as I got in the portfolio that broadband should be treated it as a great enabler. So I have been cris-crossing the country putting in not only the infrastructure and thinking of a way to fill in the blackspots, but also to look at how to kick it in the guts and give it a really good profile for delivering health and education and all the things I have done. 

Labor has been allowed to present something that is so simplistic and unachievable I think its amazing. People are just starting to realise this is pie in the sky. For $8 billion you are just not going to be able to do it.

What worries you most about Labor’s proposal?

I’m most concerned about the $2 billion Communications Fund that I fought tooth and nail to get locked in as a perpetual fund to support remote and regional services. It is just reckless to suggest abolishing that fund and rolling it into a fibre optic network that can’t possibly deliver on Labor’s promises. There is no way there will be a return on a regional network that no one wants to build anyway to support upgrades and blackspot rollouts. 

Your Opel plan has been criticised on technical grounds. What is your response to that criticism? 

It’s very technical stuff as we all know. Nobody has yet really pulled me up on any serious flaw on what I say the technology is. That is largely because I don’t make it up, I actually check very carefully. There might be differences of opinion with experts but it won’t be that I have said something out of the blue without having something to underpin it.

What about the lack of information available on the selection of Opel, what it plans to deploy and the benchmarks it has to meet? Shouldn’t that be public?

That might be something we would do as a re-elected government. You might take a look at what could be made public and what was subject of commercial in confidence. We would take a good look at what could be made available. I would certainly be disposed of looking at making as much as possible available that was consistent with not having problems with commercial in confidence considerations.

Some commentators see WiMax losing momentum as the cellular HSPA market increases the scale of its ecosystem and rate of global deployment. Is that a concern that you have picked the wrong technology here?

We didn’t pick the technology and I wouldn’t try. You need a mix, this contract has a mix of technologies. The other important thing about WiMax standard is the potential for interoperability, the fact that it is open source and the fact that there are a lot of big backers meaning costs will come down. It does not seem to have the things that can be said about the whole HSDPA world, which is a big industry.

I think it will simply transform the way competition works in rural and regional Australia. Otherwise we would have been locked into some very specific and unrewarding arguments about other sorts of operational separation. 

Labor has positioned broadband as a key election issue and woven it into several major policy announcements. How is it viewed by the Coalition machine?

We see it as important but I would say myself that broadband is not a front line election issue but what it does is. People don’t think about what network or speed they have but they know what they do and what they enjoy. It’s an enabling thing.

Tim Marshall