Telstra split bill delayed until May, negotiations to continue

The legislation designed to split Telstra’s networks into separate wholesale and retail divisions has been delayed for at least two months after the Federal Government failed to produce the bill for debate in the Senate.

The development comes as several members of the Federal Opposition, along with senators Nick Xenophon and Steve Fielding, have requested more time to review the legislation before voting to split the company.

The legislation now has a chance to be heard in the next session of Parliament, set to begin on May 11, with the Government now taking its time to strike a deal with the company regarding the sale of its copper networks.

The Government hopes to use these networks as part of the infrastructure for the National Broadband Network, reducing the $43 billion price tag.

The possibility of having the bill heard during this session was significantly reduced over the past week, with massive debate between parties and a refusal from the Government to release the KMPG implementation study of the NBN.

The Greens said earlier this week their support for the legislation was being reviewed as the Government refused to release the implementation study. Additionally, the Opposition lined up a number of speakers in the Senate yesterday to postpone the bill’s introduction.

A spokesman for communications minister Stephen Conroy said in a statement the tactic worked, with the bill now set to be heard after Parliament resumes.

“The Opposition has successfully filibustered this debate and it will now resume at next session. This wilful delaying tactic by the Opposition is holding up vital reforms to the telecommunications sector.”

But the delay could help the Government gain some support. The Opposition has repeatedly said it is waiting for the KPMG implementation study before deciding whether to pass the legislation. If Conroy released the report before May, it could provide the Government support for the bill.

However, Conroy has said there is currently no timetable for the release of the report and the Government will announce its reaction at an appropriate time.

Greens senator Scott Ludlam, who earlier this week tabled a Senator order for the Government to release the report, has said it is vital senators read KPMG’s findings before passing the bill.

“We’re not just doing this to play politics over the release of a report,” he told The Australian. “The entire industry wants to know whether the pricing structure of the NBN is going to stack up. It’s not just of consequence to Telstra, it’s of consequence to everyone.”

But the development is a win for Telstra, which has gained more time to strike a positive deal with the Government. The company has repeatedly said any forced split would destroy value for shareholders and make any negotiations with the Communications Department extremely difficult.

Additionally, it has said separation of its networks would cost $1 billion and take about five years, whereas a negotiation could be much cheaper and take less time. With debate continuing and uncertainty regarding the company’s future dissipating, the company’s shares gained another 1.28% yesterday to $3.17.