Like many Australians, I have a mobile phone. It’s a great organising tool. I was connected to One.Tel through a corporate deal brokered by my union. Capitalism is such a marvelously efficient system — not! One.Tel, whose directors include Jamie Packer and Lachlan Murdoch, was probably insolvent by December 2000, and currently owes around $1 billion, including a substantial part of its employees’ entitlements.
One.Tel went into administration on May 30, and I groaned. Changing mobile phone numbers is a hassle. When I turned my phone on two days later, it beeped: a text message. “Yes Optus…One.Tel is no longer providing your mobile service. Optus will provide your service as a courtesy for a limited time. Please contact an Optus store to discuss your options.” Damn! Well, at least there was an Optus store near my work. But I decided to wait. I wanted to keep my number!
I wondered what was happening with the 250,000 fixed line subscribers who used One.Tel for their home phone. The government would have to do something. No phone and no home e-mail, possibly for weeks. Half a million mobile phones useless. Before privatisation, it could simply order Telstra to keep the phones going. Then again, before privatisation the whole thing would not have happened.
That afternoon, another beep. “One.Tel. Your contract is still valid. Stay tuned for more great deals. Support competition. Support One.Tel.” Is this the way the company ends, not with a bang but an electronic whimper? You bet! That was the last anybody heard from One.Tel via the ether. (They still keep sending bills, though!)
Next week, it was all over. Optus was to take over all of One.Tel’s “resold” customers. Later it was announced that Telstra was to take over all of One.Tel’s mobile subscribers and all of its fixed line customers. A lucky internet service provider (ISP), Dingo Blue, suddenly found itself the proud host of nearly 100,000 potential customers. A miracle! Nearly a million potentially very pissed off people spared the worst inconvenience.
Except the 1,700 One.Tel workers, sacked with nothing. I remembered the friendly, efficient young woman who helped me set up my account. “Thanks for working for us. Oh, by the way, we’ve spent your wages. Have a nice life!” Bastards!
Now, call me cynical but the cosiness of this series of deals seems too good to be true. Australia has some pretty tough competition laws. Here were its two biggest telecommunications companies (telcos), Telstra and Optus, being handed more than a quarter of a million new contracts each, and not a peep out of the Australian Competition and Consumer Commission. Even more strange, not a peep out of any of the other telcos or ISPs. Despite the advantage to Telstra, Optus and Dingo Blue, the directors of their competitors are well aware of the precedent, and will want their escape clause when the income graph dips into the red. As for the Federal Government, well, it is an election year!
But what else may lie behind the quick fix? It’s certainly not to save the hides of One.Tel founders Brad Keeling and Jodee Rich. Assets frozen, passports surrendered, their next residence seems likely to be one of Her Majesty’s walled guesthouses. Their behaviour seems to have gone well beyond the bounds of stupidity informed by greed. You just don’t go broke selling mobile phones to Australians — unless you’ve had your hand in the till! And there’s not only the $1 billion owed to creditors. Keeling and Rich have already spent 1.2 billion of Kerry Packer and Rupert Murdoch’s money with nothing to show for it.
I reckon that the rapid clean-up of the One.Tel wreck has a lot to do with softening up the public to the idea of letting Jamie Packer and Lachlan Murdoch off the hook. As directors, they are equally liable for any “insolvent trading” by One.Tel. If Jodee and Brad are culpable of the offence, they are too, “profoundly misled” or not. The prospect of the sons of the world’s leading media tycoons and the country’s wealthiest men spending time in jail has got to be too horrible for any Federal Government to contemplate. The super-rich just don’t do prison! Certainly, there’s been no move to freeze any Packer or Murdoch assets — which speaks of a kid glove approach by regulators.
No, there’ll be a show trial where Jodee and Brad get crucified. Meanwhile One.Tel’s creditors, including its former employees and franchisees, are likely to get only 11 cents in the dollar. Unsecured creditors will get nothing.
Here’s a novel thought: how about the Packer and Murdoch empires being made liable for all of the small business and employee debts owed by their collapsed creation? It’s not as if they don’t have the cash!
Amid the general wreckage left by the ongoing global “Tech Wreck” and the local implementation of the Goods and Services Tax, One.Tel, HIH Insurance, National Textiles and department chain Harris Scarfe went under in circumstances which really blur the boundary between “normal” profiteering and barefaced piracy. The main victims are the employees, often robbed of their accrued leave, superannuation and wages, because it’s “standard business practice” to not only set that money aside, but to actively spend it to keep failing companies afloat.
Global capitalism is in the grip of a long, dragged out recession, with no end in sight. Technology stocks have fallen by an average of 30% in the past 15 months, and so-called “old technology” shares have slumped by an average 10%. Big business thinks that it can spend its way out of trouble with our money. We must demand laws which mandate worker-controlled trust funds into which employers must pay instalments for workers’ entitlements. All employers must be forced to carry sufficient cash reserves to immediately pay out all employees’ wages on demand. This means that the government must strictly enforce the existing prohibition against trading in circumstances where a debt can’t be paid when it falls due.
Too many workers have been made destitute by the outright theft of their entitlements by greedy, incompetent and/or criminal directors. It’s time to make them pay or face jail for debt defaulting.
I just had a happy thought. Jamie and Lachlan will probably be fined a few days’ pocket money, and could then claim on their directors’ insurance. Except that most such policies were held by HIH!