After the opening of the second Tasmania to Victoria cable in 1869, new rates were announced for the Victorian and Tasmanian Inter-Colonial Telegraph Service as from 1 January 1870. They were, in addition to the basic costs:
Address and signature limited to 10 words.
About 1900, rates on the Tasmania-Victoria cable became intertwined with discussions on the Cape to Glenelg cable. The more important discussions immediately followed Federation.
On 16 December 1901, the Emu Bay Times reported:
"TASMANIA'S CABLE BURDEN.
The Senate has given some attention to the anomaly in the proposed uniform telegraphic rates for inter-State messages throughout the Commonwealth. It is proposed in the Postal Rates Bill that the charge on a message of 13 words from one State to any other State is to be 1s, but in the case of Tasmania the cable charges were in all cases to be added. In other words the uniform rates were not to be uniform at all, but grossly invidious to this island. The Senate, recognising the anomaly, has struck out of the Bill the words 'with cable charges added to Tasmania' and has inserted a clause debiting the cost of the charges of the cable Company to the Tasmanian department.
This looks very like removing the load from one shoulder only to impose it on the other and it is difficult to believe the amendment will pass in this form. We take it as a good omen, however, that the injustice of penalising this State has been recognised and it seems only following out this idea to make the exactions of the cable proprietors a charge on the Commonwealth as a whole. Tasmania should not be saddled with the Strait charges no more than Queensland or Westralia should be called upon specially to bear the cost of lengthy unprofitable land lines".
In 1902, when the first Post and Telegraph Act was passed, the attendant Postal Rates Bill included costs for telegrams, there was a special rate for telegrams to Tasmania for the cable service. Although that had previously been set at one penny a word, the Postmaster-General could, by virtue of an agreement with the Eastern Extension Telegraph Company, reduce the rate if he thought fit. He therefore asked the Company to lower that charge to a halfpenny per word which was the rate listed in the 1901 Act.
On 1 October 1906, the Commonwealth took action to reduce the rate to nothing and abolish the rates of charges for messages carried over the cable. The Company challenged this decision with the High Court bringing down its decision about the reduction in September 1908 (Eastern Vs Government of Australia). The Kalgoorlie Miner of 27 October 1908 ran the following report on follow-up action:
THE TASMANIAN CABLE.
Melbourne. Oct. 26 1908.
"A special meeting of the Federal Executive Council was held to-day, to reduce the rate for messages over the Tasmanian cable. This action was rendered necessary by the High Court judgment in the case of the Eastern Extension Cable Co. against the Commonwealth. Prior to Federation, the Tasmanian Government guaranteed the company £5,600 a year revenue on certain rights being given to reduce the rate for messages. The rate per word was fixed at a half-penny.
The Federal Government, when it took over the agreement, considered that Tasmania should be placed in the same position regarding telegraphic rates as the other States. The special cable rate therefore was abolished and the interstate telegraphic rate brought into operation - the £5,600, however, being paid to the company as previously. The company claimed that the Commonwealth had no power to abolish the rate, but only reduce it from a half-penny per word and the High Court gave judgment in the company's favour. The Executive decided to-day to reduce the rate to a farthing. The reduction in the rate is purely a matter between the Postal Department and the Cable Co. The public is not concerned, as the cheap telegraph rate remains in force as previously".