Telstra responded swiftly to the Shadow Communications Minister’s call for structural separation of the National Broadband Network builder, calling Bruce Billson’s comments “totally irresponsible” in a statement released yesterday afternoon.

Telstra’s newly appointed director of public policy and communications, David Quilty, said anyone calling for the NBN to be separated is calling for Telstra to be separated, because the NBN is “essentially a major upgrade to part of Telstra’s existing network”.

At the 2008 Australian Telecommunications Summit held in Sydney yesterday, Billson indicated that the opposition supported the view held by the majority of the nation’s telco players and industry groups that the NBN builder must undergo some form of separation.

“The opposition has made it clear that if $4.7 billion of taxpayers' money is to be utilized, then we need commensurate public policy gains. We’re not about imposing new burdens on taxpayers, shareholders, or corporations; we’re about saying if you want the money there are strings attached,” Billson said in his presentation.

“And we believe that achieving effective structural separation has to be one of those things, because the natural monopoly that will be produced requires that kind of clarity.”

Quilty responded by reiterating Telstra’s stance that if further separation is required, it will not build the NBN.

“Overseas experience has already proven that separation does not work. It increases costs, reduces efficiencies, limits future innovation and, most importantly, kills off investment,” Quilty said, amid debate over whether foreign experience has proven separation to be unworkable or not.

“He [Sol Trujillo] is genuinely proud, and understandably proud, that they have been able to maintain profitability because of the poor market structure and poor regulation we’ve had in Australia

Maha Krishnapillai

Quilty stated that separating Telstra would mean breaking the telco up into “unworkable pieces”.

"Telstra is puzzled by Mr Billson's reported comments, given that this [Wednesday] morning the Office of the Leader of the Opposition confirmed that structural separation of Telstra is explicitly not Coalition policy.

"It would be totally irresponsible for Mr Billson to suggest that Telstra should be further separated, given that the Coalition sold shares to 1.4 million shareholders - who paid billions of dollars to the government as part of the T3 process only a few months ago. Telstra is not and will not be a political play thing."

Billson responded with a media release issued this morning, stating that while he appreciates Quilty is new to his role, his comments suggest he has either been poorly briefed by his colleagues or Telstra wasn't paying attention to the opposition's policies.

"The opposition repeats that it seeks to impose no new burden on Telstra or its shareholders, but if Telstra puts its hand out for $4.7 billion of taxpayer money...commensurate public policy gains are required," he said.

"Ironically, the speech Mr Quilty has reacted to, called for greater dialogue and openness about the broadband choices Australia faces and how little attention is being paid to the national and consumer interests under Labor's vague, troubled and stalled NBN tender process."