Telstra's OPEL lawsuit dropped

National ICT Minister Helen Coonan has welcomed the Federal Court's dismissal of Telstra's legal challenge to personally sue the minister over the $938 million regional network tender awarded to the OPEL/Singtel consortium.

Telstra's court action against Coonan was centred on the changes to the terms of the Broadband Connect program which filled the coffers with an additional $342 million midway through the tender process, raising the subsidy to $958 million.

The telco claimed the move hindered its ability to win the tender and took the ICT Minister to the federal court to force her to disclose documents to justify why the Optus-led consortium won the contract.

The dismissal will force Telstra to pay for Minister Coonan's court costs, however the telco is still pursuing action in the High Court where it wants the telecommunications regulatory regime dismissed as unconstitutional.

Commenting on the outcome, a spokesperson for the Minister said the ruling said "speaks for itself".

"We are looking forward to getting on with the job of providing services to consumers and for Telstra to resume looking after its shareholders," the spokesperson said.

The highly-charged debate between Telstra and Minister Coonan has involved litigation of the $958 million subsidy awarded to OPEL to extend regional broadband infrastructure, a Telstra injunction to block the government from regulating the closure of it's CDMA network, and arguments over the structure of the Universal Service Obligation (USO) and accusations that the telco is sympathetic to the Labor party.

Telstra said in a statement that the ruling allowed the federal government to "succeed in keeping secret its reasons for changing the Broadband Connect program without informing all bidders".

"It shouldn't be this hard to find out why the government spent $1 billion of taxpayers' money supporting a Singapore-backed proposal that didn't even achieve the government's stated aims," Telstra Group General Counsel Will Irving said.

"They're either hiding something or didn't understand the technology choices they were making. With $1 billion of taxpayers' money on the line, it is incomprehensible and needs explaining."

Irving also noted that Justice Peter Grahame had ruled differently in similar lawsuits.

Have an opinion on this story? Click to e-mail Darren Pauli.

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