Labor calls for ACCC powers to strip Telstra of assets

Communications shadow minister Stephen Conroy has called for competition watchdog the Australian Consumer and Competition Commission (ACCC) to be granted powers to seek Telstra divest itself of assets should the telco abuse its market power.

He has little or no chance of making the calls reality without the support of the government.

Speaking at the 2005 Australian Telecommunications User Group Conference in Sydney, Conroy told delegates that the ACCC's bouts of pugilism had so far proved ineffective in persuading Telstra to give competitors a fair go.

"The inadequacy of the current regime was vividly demonstrated recently by the ACCC's failure to lay a glove on Telstra in response to its outrageous broadband price squeeze last year," Conroy said.

To rectify the situation, Conroy proposes the government should "increase incentives" to the ACCC to get stuck into corporations should they continue to disregard the Trade Practises Act (TPA).

These include giving powers to the ACCC to force violating corporations to divest themselves of assets, and in the event of costly litigious stonewalling, fork-out for the ACCC's considerable legal costs if corporations are found to have contravened the TPA.

"Reforms we are considering include...the option for the ACCC to seek divestiture of assets of an infringing party as a remedy for breaches of part 11B [of the TPA]," he said.

"And allowing the ACCC to receive compensation for its costs of litigation from any pecuniary penalties obtained from industry participants shown to have contravened part 11B [of the TPA]."

On the matter of prizing apart the cozy relationship between Telstra's wholesale and retail divisions Conroy upped the ante calling for "ring fencing" rather than communications minister Senator Helen Coonan proposal for "organizational separation".

One veteran ATUG delegate was unimpressed by both party's suggestions.

"It's been two abominable decades of bipartisan looting at the consumer's expense. Now they propose a rabbit proof fence to make the 800 pound gorilla behave when they remove the cage. It will be like King Kong," the member said.

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More about ATUGAustralian Competition and Consumer CommissionTelecommunications User GroupTelstra Corporation

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