Telstra retains pay TV, boosts LTE prospects in bill

Telco legislation amendments provide "certainty" for Telstra

Telstra chief executive officer, David Thodey

Telstra chief executive officer, David Thodey

Telstra will keep its cable infrastructure while bolstering opportunities for its 4G technology prospects, should the latest amendments to the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 be accepted and the bill passed.

Further amendments to the bill - which has led to several delays in the past eight months - were submitted by the Department of Broadband, Communications and the Digital Economy this week as part of the Federal Government's promise to provide "legislative certainty" and "fair consideration" for the telco as result of a non-binding agreement with NBN Co.

While the government was not completely clear at the time on which amendments would be made to achieve that certainty, Telstra chairman, Catherine Lingstone, pre-empted the amendments by revealing the telco had received written confirmation from former Prime Minister Kevin Rudd that it would be able to bid for wireless spectrum; a threat the Federal Government has used against the telco should it refuse to separate either structurally or functionally.

Under the legislation amendments revealed this week, Telstra would still see structural separation of its wholesale and retail arms, as well as the decommissioning of its copper network in anticipation of a progressive migration plan for its copper and cable broadband customers to the National Broadband Network.

The functional separation of Telstra is not mentioned in the exposure draft of the amendments.

While the legislation signalled the end of at least 90 per cent of Australia's copper network, Telstra would still be able to retain its HFC or cable infrastructure to continue service of the Foxtel Pay TV, in which it has the largest stake. However, it would have to progressively cease providing broadband over its HFC network as part of the conditions of its structural separation.

The government has traditionally held back wireless spectrum bids to force Telstra's separation in some form, but the amendments will alleviate those pressures and allow the telco to potentially use the $11 billion it gains from the Financial Heads of Agreement deal to make competitive bids. Legislation highlights specific spectrum, including the 520-820 MHz range, as well as 2.5-2.69GHz range.

"We have enough confidence that we will not be constrained in the future," chief executive officer, David Thodey, told media and analysts this week in regard to possible restraints on the telco's right to bid.

Telstra recently boasted the world record for LTE bandwidth tests over the 2.6GHz bandwidth, and is in the midst of a six-month LTE trial, which it plans to roll out by the end of 2012.

Doubts of whether the bill will be passed before the next Federal election continue, with the main block in the Senate, Family First senator Steve Fielding, continuing to consult with telcos and consider the legislation. The bill must be passed before a final Financial Heads of Agreement deal is voted on by Telstra shareholders early next year, but communications minister, Stephen Conroy, warned the government was "considering other amendments" and may continue to add to the legislation.

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Tags TelstraTelecommunicationsAustralian Competition and Consumer Commission (ACCC)

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