Well Communications Minister Helen Coonan asked for it and Telstra obliged in a most unconvincing and, for shareholders, painful manner.

On 4 September, Senator Coonan challenged the big carrier to issue an ASX statement explaining how regulations have hurt Telstra. What the market got, was a figure of $850 million that the carrier has supposedly lost because of regulations but no real detailed explanation of how that figure was arrived at or what specific regulations were responsible. Then the carrier launched into a tirade about how further regulation in the form of operational separation of Telstra's wholesale and retail divisions and pricing of access to the unbundled local loop would harm the carrier.

Assuming that $850 million figure is true, it's actually chicken feed compared to the money lost over some of Telstra's purchasing decisions of the past. PCCW springs to mind. As for the more recent Kaz purchase - well this jury is out on that one.

The fact is, however, the real reason that Telstra has downgraded its profit forecast by 7-10% is that its license to print monopoly money is disappearing and the carrier doesn't know what to do about it except to demand protection. The carrier's once unshakeable hold on the voice market is fast slipping. PSTN revenues are bleeding like a wounded animal and the high value mobile voice market is getting lower value by the day because of real competition. Then of course, there's VoIP, a voice technology that Telstra has known about for years but for some reason is now lagging the market badly on.

Telstra is finding challenges to its businesses coming from all fronts. Even in its growing broadband business it is being threatened. It has smaller competitors, such as iiNet and Internode, offering superior service levels in the fixed line DSL broadband space. It is trailing competitors, such as Unwired and a host of iBurst providers, in the wireless broadband market. None of the competitors have Telstra's coverage yet. However, as Unwired demonstrated recently, there are no shortage of investors willing to help them build their networks. Telstra's advertising business is still very strong but online competition is also growing strongly on that front.

Despite all of the competition springing up like well watered flowers on a sunny day, Telstra continues to make bucket loads of money. This is money that under good management could be used to build market dominating shares in the communications technologies of the future. Instead of trailing the market in new technologies, Telstra should be leading it. Instead, what we get is whining from the current crop of managers about how Telstra is being forced to compete on a level playing field through mechanisms like operational separation.

On that last point, what is Telstra asking for exactly? Is it asking for the right to price its competitors out of the market? Does it want the right to price retail products more cheaply than it wholesales the same products to competitors? If that's really the only way Telstra believes it can continue to operate viably, then perhaps the Government should sell its share to allcomers for whatever price they can get for them.