Telstra plunders CBD for profits

Cr Nicholas Reece makes a call on the new model pay-phone (left) and the old way (right).

By Shane Scanlan

After years of incremental encroachment into the public domain for private profits, Telstra appears to have crossed a City of Melbourne “line in the sand” with its latest rollout of monster digital advertising.

Locals would have witnessed the recent unveiling on CBD footpaths of about 40 3m x 1.1m digital signs – advertising platforms geared to reap hundreds of millions of dollars – masquerading as pay phones.

For many years now, Telstra and its joint venture partner, French multinational JCDecaux, have been ruthlessly exploiting a loophole in last century’s Telecommunications Act, which allows them to place pay-phones wherever they please – without needing planning permission.

Until now, it was generally accepted that councils at least retained planning control over the outdoor advertising component of the “phone boxes”.  But this too seems to have legally morphed to the advantage of the rogue telco.

The sheer scale of the new signs and the universally-accepted understanding that pay-phone are obsolete, have tipped the City of Melbourne over the edge.

Complaints from retailers and the public, who understandably, but incorrectly, blame the council for allowing such an outrage, are compounding its opposition.  And, with a further 80 signs understood to be potentially on their way, the situation is becoming desperate.  The signs are taking root in the best locations throughout the CBD – and not necessarily where pay-phones have been.

The council is privately appalled at the latest assault. But it is loath to publicly decry the assault, lest it jeopardise its narrowing legal options to challenge Telstra.

CBD News understands the city is in discussions with other capital city councils, which are being similarly exploited.  Legal strategies are being discussed, but an amendment to the anachronistic legislation could ultimately halt the pillaging.

Federal Communications Minister Mitch Fifield did not respond by deadline to CBD News on whether he would amend the law.

In a statement prepared by the administration, council’s planning chair Cr Nicholas Reece said: “The City of Melbourne has received a large number of complaints about the rollout of a swathe of new-generation Telstra telephone kiosks fitted with large digital advertising billboards.”

“We are concerned that the new structures are impeding pedestrians, significantly disrupting footpath traffic flow and negatively impacting the public realm.”

“With indications that the number of Telstra structures to be installed in central Melbourne may triple in the coming months, City of Melbourne is currently in high-level discussions with the company about this issue,” Cr Reece said.

Telstra currently operates about 700 more modest, pay-phone-based, static advertising signs with JCDecaux in Melbourne, which pull in tens of millions of dollars every year.

In 2016 it attempted to convert 23 of these signs in the CBD to digital models, but was thwarted by the City of Melbourne.  Each of these signs was estimated at the time to be capable of earning $8000 per week.

Telstra is, in effect, double-dipping on pay-phones.  It is not only earning millions of dollars by piggy-backing outdoor advertising, it is also being paid hundreds of millions by the federal government to maintain them under so-called Universal Service Obligations. In 2016, the Productivity Commission recommended scrapping this arrangement, saying it was “anachronistic and needs to change”.

“In an age where basic phones and payphones are rapidly becoming outdated, the lack of transparency and accountability makes the continuation of current arrangements difficult to justify from the point of view of those who contribute to its funding,” the commission said.

Telstra did not respond by deadline to questions from CBD News.

Post-Publication: Telstra subsequently replied, claiming that the council gave it planning permission for the current activity back in 2016

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