Regulator thumps gold-platers
Bruce Robertson, beef farmer from Burrell Creek - community hall, one house and a phone box - notched up another win against the electricity juggernauts this week.
Readers may recall that Robertson - a critic of "gold-plating", or excess spending by the electricity networks which drives up our power bills - had been threatened with a lawsuit by Grid Australia.
The contretemps harks back to early last year, when TransGrid unveiled plans to run a column of 330,000-volt coat hangers up the valley near Robertson's farm. Robertson accused them of gold-plating. They muscled up and threatened to sue him.
But there was a slight hitch. Grid Australia is a peak body, a front for the state transmission giants. And governments should hardly be suing their own citizens. Robertson declined to be muzzled anyway. That was the slight hitch. A more glamorous hitch was to come.
A search of the Australian Securities and Investments Commission database showed the ABN for Grid Australia Limited was registered to a Daniel Rosenberg of Caulfield South in Melbourne. Born in Israel in 1974, Rosenberg was the sole shareholder of Grid Australia, and its sole director.
Vainly pining for a Mossad connection, we tracked him down. No, Danny, a graphic designer by trade, had never heard of TransGrid, nor SP-Ausnet, ElectraNet, Powerlink, or Western Power for that matter, or their lawyers Ashurst.
"I'm Grid Australia. That's my company," said the real chairman of Grid Australia, sporting his funky white-rimmed glasses. "You say that someone is using my actual ABN number?"
The Bruce and Goliath story had its denouement this week when the Australian Energy Regulator condemned TransGrid for its Stroud-to-Lansdowne transmission line. There was no justification for the $160 million project, said the regulator. It followed admissions in January in a NSW report that it was "difficult to gain a complete understanding of the reasons for the promotion of a 330kV solution".
Gold-plating is no conspiracy theory. The question is: how many billions have been sunk around the country in these souped-up projects?
The structure of the business is the fatal flaw. Thanks to their "regulated return" model, the more the networks build - and the more they spend - the higher their financial return. Like the investment adviser on a cut of a client's gross assets, the temptation to leverage is too high. Like liquidators and lawyers, these guys can set their own prices. For consumers, it's deadly.
Telstra, like the banking and supermarket cartels, may soon encounter the paradox of success. Such may be an exotic experience for the lumbering telco but Telstra is braining it right now at the expense of its rivals Optus and Vodafone.
It signed up 600,000 new mobile contracts in the past half-year (it counts each SIM) and 80,000 internet customers. Tearing up his rivals' market share is a good look for the Telstra chief David Thodey, but the price of success may be heightened political sensitivity, even the spectre of further regulation.
Vodafone announced a new call centre in Tasmania on Friday, albeit spurred on by government handouts. While this will create 750 jobs on the Vodafone Isle, Telstra is busy offshoring 400-odd Sensis jobs to the Philippines or India.
Sensis originally proposed 200 jobs go and put this to the Telstra board in November. Telstra rejected both it and a subsequent proposal with a higher figure.
Despite cries by Sensis executives that a move to offshore 391 jobs and cut the rest of staff might damage customer service, Telstra implored them to "do better". With a gun to their head, they came back with the 648 job cuts announced last week.
There is now a mutinous passion in senior sales ranks. The pressure has been on Sensis since the directories business came under attack from Google - yes, that's the Google Australia which pays $74,176 in tax last year on its $1 billion revenue, well in excess of the salary of a Filipino call centre operator.
Sensis still produces $390 million in profits. In recognition that speaking to an Aussie has a value, Sensis is keeping its "account managers" for those customers who spend more than $40,000 a year in Australia.
It was a neat irony that, precisely when discussing the news of a Vodafone class action with a contact this week, your humble scribe's mobile phone cut out. Telstra, it happens all the time. It is hard to stave off suspicions that these network problems are perversely profitable as somebody has to call back to finish the call, and usually twice as you tend to get that damned message bank!
Anyway, the Vodafone lawsuit does have a touch of the flashing lights and sirens about it.
The class action is a motley collection of customers who claim they were damaged because they couldn't make a call or take a call at some point in time. Had their phone been working, they say, they might not have missed out on that job offer, and so on.
Proving loss, let alone quantifying losses, for such a jumble of claims would seem fraught. Nevertheless, we intend to sign up forthwith. Admittedly, one is not a customer of Vodafone. However, on the basis that, had one been a Vodafone customer - which is plausible on the basis of price - it is not beyond the realms of possibility that one might have been phoned by a third party, unwittingly calling the wrong number, but urgently wanting to deposit $10 million into one's bank account nonetheless.
"Yes, $10 million, your honour, plus interest!"