Telecommunications giant Telstra has urged Parliament to quickly pass legislation that will split the company’s retail and wholesale divisions, saying laws must be created to allow construction of the NBN.
And in a surprise twist in policy, opposition communications spokesman Malcolm Turnbull says the Coalition no longer opposes the split but wants to examine the bill to make sure all changes are right and necessary.
He also says the Coalition opposes the Government forcing Telstra to agree to a deal with a “gun to its head”.
The legislation comes after a tumultuous year of debates and negotiations between the Government and Telstra. The first bill was struck down earlier this year, but an $11 billion agreement between the two parties has enabled the creation of a new bill.
“On balance we support the passage of the bill,” chief executive David Thodey said in the statement, prompted by the introduction of the legislation into Parliament yesterday.
“Telstra is confident the Bill now provides the mechanisms needed to secure agreements with the Government and NBN Co. regarding Telstra’s participation in the NBN and provides much greater certainty on access to fourth generation wireless spectrum.”
Thodey also said the company “strongly” recommends that consideration be given to further amendments that guarantee “appropriate checks on regulatory decision-making”.
The new legislation comes after the Government and Telstra struck an $11 billion deal that will see the company close down much of its copper network, and transfer its customers onto the NBN. But part of the bill will also grant the ACCC more regulatory powers within the telco industry.
Turnbull said in a statement yesterday the Coalition remains “broadly supportive” of the changes, but also warned it does not approve of Telstra making the deal while the Government “holds a gun” to the company’s head.
“We remain supportive of these changes, as long as any additional regulatory powers granted to the ACCC are subject to appropriate checks and balances and procedural fairness is maintained. The Coalition will reserve the right to move amendments to this section of the bill in the Senate.”
“We also strongly recommend that consideration be given to further amendments that guarantee appropriate checks on regulatory decisions making and bring telecommunications into line with other industries.”
This is a significant change from the Opposition’s previous policy. As recently as the election campaign, the Opposition stated it opposed the structural reform and would continue to do so in Parliament.
However, Turnbull points out in his statement that the Coalition will still oppose the parts of the legislation that impose functional or structural separation by refusing the company access to wireless spectrum.
He said the market for wireless is highly competitive, and that excluding it from participating in a completely separate market is “unfair, illogical and anti-competitive”.
“What we do object to is the government holding a gun to Telstra’s head… and saying ‘we will use our power to stop you bidding for wireless spectrum unless you do what we want’,” Turnbull said in a press conference yesterday.
However, despite Turnbull’s insistence the Opposition is in favour of the reforms, both communications minister Stephen Conroy and Prime Minister Julia Gillard have both warned the Coalition not to cause significant delays.
“Every day of delay for these reforms is another day of higher prices, less choice and fewer innovative services for consumers and small businesses – especially for those in regional areas,” Gillard said yesterday.
The introduction of the legislation is a key pillar in the move towards the construction of the NBN and the separation of Telstra’s wholesale and retail arms, which will fundamentally change the nature of the telco market.
When the split occurs, Telstra will no longer operate wholesale access and will be forced to compete in the retail environment with other fast-growing retail-only players, such as iiNet and Internode – but the company is struggling in that regard.
The company is set to launch a new cloud-based service for businesses today, a venture that will hopefully deliver some new revenue streams. An event will be held this afternoon at which Telstra will unveil more details about the structure, which will reportedly see it partner with consulting group Accenture.
The move comes as Microsoft announced yesterday it would launch its new Office 365 products through Telstra on the cloud.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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