Telstra May Sue Over Leaked Documents

Telstra has consulted their legal advisors, claims Company insiders following the exposure by the Rudd Govrnment of confidential in confidence information relating to the value of the telecommunications carrier.

“This was Information which Telstra supplied in good faith in the belief that it would not be leaked into the public domain. As a result of the leak damage has been done to not only to Telstra’s negotiations with the Federal Government but in any other negotiations Telstra may want to have with other parties in the future”. said one Telstra source.

The leaking of the “highly confidential” information in documents, which some Liberal politicans are saying were deliberately revealed, has raised doubts about the future of Communications Minister Stephen Conroy after the Minister admitted personal responsibility for publishing confidential information about the value and costings of Telstra’s copper network assets.

Publication of the information ­ marked “commercial in confidence ” ­ has thrown a massive spanner in the works of the Government’s plan for telecommunications reform, involving structural separation of Telstra. It seems likely to lead to a breakdown in negotiations between Telstra, the Government and NBNCo over the reform plans.

The value of the assets ­ which Telstra might have been seeking to exchange for cash or shares in the National Broadband Network ­ was put at between $8 billion and $33 billion in an evaluation report prepared by the Australian Competition and Consumer Commission, based on information supplied to the Government’s former expert panel under confidentiality clauses by Telstra.

If an historic, depreciated valuation method was used, the report said the network would be worth $8 billion, including $3.9 billion for the ducts and pipes and $2.7 billion for the copper cables.

However, it said that if a gross instead of depreciated value was used, and a current instead of historic value, the network was worth as much as $40 billion. The cost of replacing the network was estimated to be about $33 billion.

A Communications Day report said the published data appeared to confirm that Telstra would be asking for at least $12 billion in compensation for its duct and pipe network based on the depreciated current cost valuation.
(However, following Conroy’s monumental gaffe, other observers suggest that figure is likely to balloon closer to the $40 billion estimate.)

The possibility of legal action by Telstra is also in the air. And Communications Day has raised the further possibility of future disputes with other operators seeking access to the Telstra pipes.

At least one access seeker in dispute with Telstra has indicated they will use the information to re-open their negotiating position, Comms Day said.

Conroy yesterday described as “regrettable” the error of not removing the confidential information before the document was tabled. “I take responsibility … it was a mistake,” he told the Senate.

The Minister said he had spoken to Telstra’s chief executive David Thodey about the mistake, but did not reveal Thodey’s response.

Opposition senators called on Conroy to resign, a move he was resisting last night.