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Coalition defends Telstra « Previous | |Next »
October 24, 2009

I see that the Coalition has backed calls by Telstra to delay the passage of the federal government's proposed legislation (Telecommunications Legislation Amendment Bill, ) to separate its retail and wholesale arms as part of its plan to build the $43 billion National Broadband Network.This separation would create a more level playing field before rolling out the NBN.

The policy preference is for Telstra to sell its wholesale network to the new Government-owned NBN company, which would then tear the copper out and use the infrastructure to lay the fibre, to deliver much faster and reliable broadband to homes and businesses.

The Rudd Government wants Telstra to voluntarily separate its retail and wholesale arms. Failure to do so could see Telstra forced to divest its cable network and half-share in pay-TV broadcaster Foxtel, or face being denied the wireless spectrum it needs to evolve its lucrative mobiles business and roll out fourth-generation mobile technology.

The legislation has passed the House of Representatives. The battle takes place in the Senate.

The Coalition will try first to defer consideration of the legislation until the completion of an implementation study into the NBN project, If unsuccessful with its deferral move, the Coalition will try to defeat the bill on its second reading in the Senate. If it cannot get the necessary support to defeat the bill from the Independent Senators-, then the Coalition will move a range of "significant" amendments---including the removal of measures to break up Telstra

The Australian Greens and independent senator Nick Xenophon have indicated they will not support the opposition move to delay a vote on Telstra's future.It would be strange for the Nationals to oppose this legislation as that would amount to abandoning regional Australia need for better broadband service.

My guess is that it would require either senator Steve Fielding or one Nationals senator to get the legislation through after a Senate inquiry into it reports back in late October; and that Telstra will eventually choose to throw its lot in with the Federal Government's proposed network rather than compete with it.

The Coalition's strategy is basically aiming at undermining the Government’s policies without coming up with any other policy alternative. Their current rhetoric is crude: the Rudd government is taking a meataxe to Telstra. The rhetoric ignores that the Howard Government created a policy framework that encouraged Telstra to "game the system" to defend its infrastructure monopoly.

| Posted by Gary Sauer-Thompson at 1:40 PM |