Telstra issues objections to government’s structural separation plans

9 Oct 2009

Australian incumbent Telstra has said that it will not cooperate with the government on plans to structurally separate the company, iTnews reports. In a late response to the state’s recent proposals, Telstra has issued a list of points detailing its objections to the implementation of the Telecommunications Legislation Amendment Bill 2009 in its current form, claiming that such reform is ‘unjust’.

One of the major issues that Telstra has raised relates to government threats to deny it access to additional mobile spectrum should it not voluntarily separate. The telco claims that such action would reduce competition in the wireless sector, limit the amount that future spectrum auctions may raise, and deny Telstra customers an upgrade path. It said that it saw little incentive to carry out a structural separation due to the fact that the government had given it no guarantees on access to mobile spectrum should it choose to structurally separate; ‘There is no certainty that – if Telstra submits a structural separation undertaking, the Australian Competition and Consumer Commission accepts that undertaking and Telstra then implements that undertaking – Telstra will be allowed to bid for LTE/4G spectrum,’ the submission said.

Other points made by Telstra include the argument that its 63% market share cannot be viewed as a ‘dominant’ position, and that the most likely purchaser of its stake in Foxtel – which it may be forced to divest – would be News Corp or Consolidated Media Holdings, either of which’s successful acquisition of the unit would lessen competition in that sector.

Telstra has called for any regulatory reform legislation to be delayed until after the Federal Government’s National Broadband Network (NBN) Implementation Study is complete, giving the company more time to negotiate its position with the government. ‘I want to stress that while Telstra continues to support the government’s vision for the NBN, we believe the bill to be unnecessary,’ David Thodey, Telstra’s CEO David said in a statement, adding, ‘Telstra continues to negotiate with the government in a positive and constructive manner on the NBN.’