Telstra shoots messenger: accuses economists of producing 'bogus report'

coredump

FROM: http://www.itwire.com/content/view/18633/1095/

At a seminar in Canberra on Thursday 5 June organised by the,overlapping, carrier grouping behind the Tell The Truth Telstra (T4)web site, the CCC presented a report by the Centre for InternationalEconomics. The report claimed to have determined that "Australianconsumers will pay 15 percent more for broadband services if Telstrawins the rights to build and manage a National Broadband Network."

Furthermore, it concluded that:
- Australian consumers and the economy would be $897 million worse offunder a Telstra owned and operated National Broadband Network;
- Telstra's targeted return on its capital investment was relativelyhigh and "may be consistent with the abuse of market or monopoly power";
- The build-cost scenarios for Telstra's broadband network wouldincrease inflation, reduce national growth, lower wages and reducenational consumption;
- The impact of Telstra's network would "lead to a general contraction of the Australian economy."

Strong stuff! And Telstra's response was immediate and ferocious. Itdid not attempt to counter the report's finding in any detail, simplydismissing the report as 'bogus' and accusing it competitors of having"sunk to new lows in their bid to stop Australia getting a high-speedbroadband network."

Group managing director for Telstra Wholesale, Kate McKenzie said:"This is a completely bogus report that has been bought and paid for bya bunch of competitors who want one thing only - to stop the buildingof Australia's national broadband network and keep their current cosyarrangements. "The report has no basis in fact. It is a dishonestdistortion that is designed to do nothing but delay the process."

When you want to discredit a report you an always find a few words toquote selectively in support of your cause. Thus we have McKenzieclaiming "The report itself says: 'estimates presented in this reportmay not be precise' and that the 'estimation error in the WACCcalculations presented in this report may be significant'."