Fed Govt Goes After Telstra’s Monopoly

Broadband and Communications Minister Stephen Conroy has set his sights on splitting Telstra up.

It’s official – the Federal Government is set to split Telstra into retail and wholesale businesses, and will even force it to separate if it doesn’t do so of its own accord, reading in-between the lines from a press release from Communications Minister Stephen Conroy.

“For years industry has been calling for fundamental and historic micro-economic reform in telecommunications. Today we are delivering this outcome in Australia’s long term national interest,” Senator Conroy said.

Telstra is one of the most highly integrated telecommunications companies in the world across the fixed-line copper, cable and mobile platforms.

“The reforms address the structure of the telecommunications market and provide Telstra with the flexibility to choose its future path,” Conroy said. “It is the Government’s clear desire for Telstra to structurally separate, on a voluntary and cooperative basis,” said Senator Conroy. “The Government believes it is possible to achieve a win-win outcome in the interests of Telstra, its shareholders and, more broadly, all Australians.”
These reforms will include:

• addressing Telstra’s high level of integration to promote greater competition and consumer benefits;

• streamlining and simplifying the competition regime to provide more certain and quicker outcomes for telecommunications companies;

• strengthening consumer safeguards to ensure services standards are maintained at a high level; and

• removing redundant and inefficient regulatory red-tape.

“The existing telecommunications anti-competitive conduct and access regimes have been widely criticised as being cumbersome, open to gaming and abuse, and provide insufficient certainty for investment,” Conroy said.

Since the commencement of the regime in 1997 there have been more than 150 telecommunications access disputes compared to only three access disputes in other regulated sectors, including airports and energy sectors.

The Government will strengthen consumer safeguards including the Universal Service Obligation, Customer Service Guarantee and the Priority Assistance arrangements to ensure consumers are protected and service standards are maintained at a high level.
In line with the Government’s commitments to address impediments to Australia’s long-term productivity growth, it will remove unnecessary regulatory burden on the industry.