The option that requires the least capital outlay is to obviously have done nothing.
Having privatised Telstra's wholesale network, it's an interesting question as to whether the Labor government should have then down the path of effectively building a new public network from the ground up and having gone down that path, made a huge mess of it. Remember too that it was their plan B.
Perhaps Telstra's wholesale network should have been retained by the Howard Government but sometimes when these things are done, they're more difficult to undo.
Labor were forced onto their plan B after Telstra submitted a non compliant bid that didn't meet the requirements to build a network for 98% of the country and no one else had the capablity to build the network that submitted bids.
Well the real problem was that Howard didn't split Telstra when it was privatised whch would have made all these negotiations with Telstra a lot simpler now. To his credit though at least he prevented Telstra from building a FTTN network that wouldn't have required Telstra to provide 3rd party access to competitors as Telstra had planned.