Telstra senate hearings - CCC, ATUG

CCC says separation bill delays won't wash, ATUG says it will support the bill only if negotiations for a neffective, sustainable structural separation fall through

Calls to delay the passage of legislation to structurally separate Telstra “simply do not wash” according to the executive director of the Competitive Carriers Coalition (CCC), David Forman.

Speaking at the Senate Standing Committee on Telstra’s structural separation, Forman said the Telstra separation Bill was not a ‘Telstra bill’ but legislation that is designed to create a sustainable, competitive industry for the benefit of investors and consumers.

“On the one hand, the problems that are being addressed by this bill could not be more clearly known or clearly understood and the proposed solutions that the bill presents are not novel but in fact well-established, and there are plenty of precedents for them being used both here and overseas in telecommunications and in other industries,” he said.

“On the other hand, the cost of delay is quite clear while any benefits are dubious at best. Delaying the passage to see if Telstra chooses to negotiate some voluntary separation agreement with the government needs to be weighed against the certainty that every day that action is delayed is another day that Australian consumers suffer high prices and poorer services compared to the rest of the developed world.”

Forman claimed that delaying the bill in favour of commercial negotiations between the ACCC and Telstra could result in no change whatever to the existing telecommunications environment.

“Let us remember that Telstra has before said that they were 98 per cent of the way towards concluding a secret deal with the ACCC only for us later to discover that Telstra was actually pursuing 110 per cent [as its goals] not 100 per cent and that entire deal evaporated into nothing,” he said.

“It is not surprising that Telstra will attempt to delay their passage. Telstra are effectively in clover with profits that are the envy of the rest of the telecommunications world. The time has come, we believe, for those margins and this industry to be exposed to the disciplines of real competition. The rest of the industry expects action now and we believe that consumers need it.”

Forman also used his appearance at the Standing Committee to argue that under the current regulatory framework, Telstra had not provide equal treatment to CCC members when they sought access to Telstra’s wholesale network.

“I noted that Telstra has been talking about the quality of the information systems that they have built for their wholesale system,” Forman said.

“This would be the same information system that my members have had cause to complain about repeatedly to the ACCC because of the long periods where that system has been down, where my members have had no access to customers, where their attempts to connect new customers have been delayed, where their attempts to have faults fixed have been delayed, and where they have had no explanation from Telstra for days as to what is going on.”

Also speaking at the Standing Committee, Rosemary Sinclair, managing director at the Australian Telecommunications Users Group (ATUG) said the Telstra separation bill had to consider the long-term interests of all telecommunications end users.

“We think a win-win for the Government and Telstra will also be a win for end users. But we do not see any reason for those discussions to be the cause of any delay to this legislation. We would like to see this legislation passed as quickly as possible,” she said.

“We think that it in fact contains the incentives that have caused the discussions that have happened so far to get underway, and that without those incentives there is no likelihood of a good outcome on that issue of structural separation. Should those discussions not get to the point of effective, sustainable structural separation then we would support the functional separation model outlined in the bill.”

Telstra used its own appearance at the Senate Standing Committee on telecommunications legislation amendments to reiterate its support for the NBN, and its opposition to the Federal Government’s structural separation bill.

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