Telstra Bill will finally make it to the Senate tomorrow

Telstra may finally see structural separation, according to a bill set to be tabled in Parliament tomorrow

The Federal Government will introduce a Bill that aims to structurally separate Telstra to the Senate on Wednesday.

The Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009, which communications minister, Senator Stephen Conroy flagged would be tabled last week, targets three issues:

  • Concerns about Telstra's monopolistic behaviour
  • Access and anti-competitive conduct regimes
  • Consumer safeguard measures such as Universal Service Obligation (USO), Customer Service Guarantee (CSG) and priority assistance.

The Bill, according to an Explanatory memorandum, will enhance competition in the telco industry while also strengthening consumer rights surrounding misconduct.

One of the Bill's key aspects undeniably surrounds Telstra's dominant position in the industry which, according to the memorandum, has "hindered the development of effective competition in the sector". In response to this, and in the lead-up to legislation surrounding the National Broadband Network (NBN), the Bill will propose the voluntary, structural separation of Telstra that would see its wholesale and retail arms spun-off into separate companies.

If Telstra chooses not to separate, it will be effectively restricted from purchasing additional bands of radio spectrum to boost its wireless broadband offering.

It could also be forced to undertake a functional separation which would ensure its wholesale functions operate "at arm's length" from the rest of the company. The structural separation will also require Telstra to wholesale services at an equivalent price to other telcos, and provide transparent information to the competition watchdog.

The Bill will also increase the powers available to the Australian Competition and Consumer Commission (ACCC) as well as the Australian Communications and Media Authority (ACMA) over the telecommunications industry. The increased powers follow a commitment from ACMA to investigate the entire industry.

The Bill has been delayed from entry into the Senate several times, angering the Federal Government and Telstra's competitors.

“The Opposition have employed every tactic possible to delay debating this Bill," Conroy said at a press conference held to release the NBN Implementation Study. "They have had three debates about whether we should debate it… they have hijacked the Senate’s actual procedures… rather than allow the Government to bring forward its own bills."

Conroy was also steadfast on the issue of structurally separating Telstra, which he believed would benefit from the greater powers provided to ACMA through the Bill.

"At the moment Telstra is ripping telephone boxes out of homes out of suburbs out of communities out of regional towns at an extraordinary rate - 5000 or so in the last 18 months I believe,” he said. “This legislation will introduce a stop mechanism. If the local community want to keep their local phone box they can go to ACMA…. ACMA can say [to Telstra] 'no you can not'.”

Telstra (ASX:TLS) has opposed the Bill since it was first announced.

The NBN Implementation Study found that the fibre-to-the-home network could be built without Telstra, albeit in a worst-case cost scenario.

The Senate is also expected to deliver the final report on its select committee on the NBN this week. Specific legislation surrounding the operation of the National Broadband Network and its operator, NBN Co, is slated to appear in the Senate by July.

Telstra's competitors have exclaimed their satisfaction with the announcement of a structural separation.

“Telstra better get with the program", Optus spokesperson, Maha Krishnapillai, told told <i>Computerworld Australia</i> recently, adding that the incumbent telco should "get out of the way."

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Tags NBNTelstraSenator Stephen ConroyNational Broadband Network (NBN)Senate Select Committeetelstra separation

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