The Labor Government in 2009 appears to have considered Telstra its main obstacle to setting up a company that would build a national broadband network for the country.
Tactics discussed during planning in 2009 before setting up the NBN Co have been revealed in documents that were found in two old locked cabinets.
The ABC obtained the documents from the person or persons who bought these cabinets at a second-hand shop. The broadcaster has made select documents available on its website, presumably the pick of the crop.
Labor planned to play hardball with Telstra, judging from the two documents.
{loadposition sam08}One document discussed how it would deal with Telstra, were the telco to split into into wholesale and retail arms, before setting up the NBN Co to take on the job of building the national broadband network.
It showed that the government planned to try and force the telco to negotiate on its terms.
"If Telstra separated into two (or more) companies — a retail service provider (Telstra Retail) and a network and wholesale company (Telstra Wholesale) — Telstra Retail's investment in NBN Co would always be limited by the caps while Telstra Whiolesale's would not," one document, titled "Strategy for negotiating with potential investors in NBN Co" says.
It adds: "Telstra Wholesale's investment would always be limited by the government's need to remain majority shareholder until privatisation."
It also says: "Telstra will initially approach the government with a number of proposals which the government will need to politely but firmly resist.
"The strategy is … [for Telstra to] ultimately approach government to invest or use NBN Co's network on the government's terms."
The Labor Government aimed to remain the majority shareholder in the company until it was fully privatised. Apart from Telstra, it was predicted that companies like Optus, Macquarie and Internode would be interested in gaining influence over NBN Co.
The mess that the NBN is in today would probably not exist if Telstra had been allowed to build the network on its terms.
Another document said: "The government does not need to rush into negotiations with investors making early offers. The government should keep interested parties engaged through consultation, rather than negotiation."
The Labor Cabinet of the time was told that the government would provide an initial amount of $4.7 billion for the build. A total of $43 billion was postulated as the total cost and a finish date was set for 2017.
Options to pay for the project included the issue of bonds.