Telstra chief executive Sol Trujillo yesterday described Australia's telecomms regulatory regime as obsolete and more suited to the last century.
Trujillo said the current rules hinder competition and the delivery of services to customers.
Speaking in Lismore (northern NSW) during his first to regional Australia, he said the nation needs a regulatory regime that encourages new technologies and new services for customers.
"Current rules and regulations and administrative practices do not do that; they are rules that belong to the last century," Trujillo said.
He backed a proposal by Nationals leader Mark Vaile to set up a $2 billion telecommunications future fund to secure services for rural areas.
"Others say it should be $5 billion. I don't know what the right number is but it is the kind of creative thinking we need to encourage," Trujillo said.
His comments come as the industry, the government and regulators debate the future of the industry under a fully privatized Telstra.
The government is expected to sell its 51.8 per cent stake in the telco in 2006 with legislation currently being drafted to go before parliament.
Trujillo said the debate isn't just about Telstra, it is about ensuring world-class telecommunications services are available to all Australians, no matter where they live.
"It's a debate about whether old economy regulations can be changed to meet the requirement of a new information economy that is re-shaping everything from mining, agriculture, and energy to the operation of small and mid-sized businesses in rural areas," he said.
"The current regulatory regime creates digital divides because it doesn't foster competition and stifles innovation.
"Instead of protecting the consumer, they deny choices to the consumer."
Trujillo heads to central Queensland today and then to Brisbane where he will meet Queensland Premier Peter Beattie.