CCC slams Telstra separation fightback

CCC slams Telstra separation fightback

Claim that separation legislation should be delayed until after the NBN implementation study as a "self-serving nonsense"

The Competitive Carriers Coalition (CCC) has slammed Telstra’s announcement that it will fight the Federal Government’s structural separation legislation.

The industry body’s executive Director David Forman in a statement described Telstra’s claim that the legislation should be delayed until after the NBN implementation study as a “self-serving nonsense”.

“This is a transparent delaying tactic that is intended to create confusion in the Senate and buy Telstra time to avoid reform altogether,” Forman said. “The reforms to promote competition in communications are desperately needed and years overdue. They have nothing to do with the NBN, and Telstra knows it.

“The reality is that every day that these reformed are delayed is another day that Australians will be forced to pay among the highest prices in the developed world for basic telephone services.”

In a separate statement addressing Telstra shareholder concerns about the separation, the CCC said these concerns overlooked disadvantaged telecommunications consumers.

“The alternative future proposed by these shareholders would be for Telstra to have the unfettered ability to deepen its already unsustainably dominant position in all markets, including through a right to lock up any of the public asset represented by the spectrum likely to become available for wireless applications in the future,” the industry body said.

The body claimed that consumers in remote areas where competition had been unable to gain a foothold, had been saddled with the poorest services and the highest dissatisfaction under the current telecommunications environment.

“Perhaps the fund managers complaining from their city offices – who apparently did not read the Telstra prospectus and bought shares in the belief they were entitled forever to monopoly rents – would like to go to those communities to explain why it is not ‘fair’ for the Government to try to bring them decent competition,” Forman said.

In a recent blog post, telecommunications industry analyst Paul Budde wrote that Telstra to date had been very clear that it must, and will, look after the interest of its shareholders.

“But is the interest of shareholders best served by hanging on to a dying monopolistic structure that worked well for the company in the past?” Budde wrote.

Budde also questioned the argument that shareholders were unaware that a potential separation of Telstra was in the offing, arguing that “those who invested in Telstra did so with their eyes wide open”.

“With such massive opposition to the [initial] privatisation the likelihood of regulatory changes could have been rated as extremely high. And change is what is now taking place. To claim ignorance about all this is, in my view, a bit rich. The punters took the risk and there is no need for the rest of the country to feel sorry for them now."

According to research firm Ovum, Telstra’s public declaration to fight the separation Bill would buy the company more time to engage in behind-closed-doors discussions on the NBN.

“We never expected Telstra to concede anything in advance of a deal with the Government on the NBN. In our view, this submission should be read as an ambit claim, David Kennedy, research director at Ovum said in a statement.

“Any concessions by Telstra will be made to the Government directly in the context of the NBN negotiations, not in a public submission to a Senate Committee.”

A spokesperson for the Internet Industry Association (IIA) said the body welcomed public and industry debate on the best means that competition can be achieved, but added that “the history of the regulatory approach has not provided many gains so far.”

Sign up for Computerworld newsletters here.

Email Computerworld or follow @computerworldau on Twitter and let us know.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Tesltraovumpaul buddeSenator Stephen ConroyCCC

More about BillIIAInternet Industry AssociationOvumTelstra Corporation

Show Comments