T4 recently released a case study of tactics Telstra uses to manipulate facts and systematically mislead.

It was noted in the study that “if we understand Telstra’s standard pattern of response we can expose the untruths in other instances”. Lo and behold, just a few days later another instance of Telstra’s ongoing tactic of fact distortion arises:

Dr Chris Doyle of the University of Warwick released a report (commissioned by Optus) entitled, “Structural separation and investment in the National Broadband Network environment”

Cherry picking statements
In article about the report which appeared in the Herald Sun, Fleur Leyden quotes Telstra spokesman Jeremy Mitchell saying the company “was ‘seriously considering’ using parts of the report in its NBN regulatory submission”.

Mr Mitchell then extracts the following statement from the report: ". . . the costs of a network might be higher as a result of structural separation because coordination between retail activities lying downstream and investment activities in the network upstream are disconnected."

This is another case of Telstra avoiding the overall conclusions and findings of a report and using select quotes to distort the truth. The complete paragraph of the report states:

“On the one hand, the costs of a network might be higher as a result of structural separation because coordination between retail activities lying downstream and investment activities in the network upstream are disconnected. On the other hand, structural separation is favourable for downstream competition as it removes the incentives for discrimination – the regulated monopoly network which is independent of the downstream retailers is interested in maximising profits by selling to as many of the retailers as possible. Competition effects may dominate investment effects.”

As an Optus spokesperson points out, "Telstra is cherry picking sentences while ignoring the positives and the conclusion which is unambiguously in favour of a robust form of separation."

The full report can be viewed from the T4 website and findings include:

• “Structural separation is argued to be more appealing than alternatives such as operational or functional separation as it requires a lighter regulatory framework.”
  
• “The report concludes by arguing that structural separation has a number of attractive features in the context of the Australian NBN process. At the very least, policy with respect to the NBN should adopt a robust functional separation model as in the case of the New Zealand approach towards its vertically integrated incumbent...”

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