Shadow Communications Minister Malcolm Turnbull has revealed the Coalition will not support part of the telecommunication reform Bill that forces structural separation on Telstra by imposing wireless spectrum bans if the telco refuses to comply.
"The Coalition will oppose those parts of the legislation that impose functional or structural separation upon Telstra's fixed-line businesses by refusing the firm access to wireless spectrum," Turnbull said in a statement.
"The ACCC and many others have found that the Australian wireless market is highly competitive," he added. "Whatever may be the merits of separation, imposing it upon Telstra by excluding it from participating in a separate and vigorously contested market is both unfair and illogical."
Turnbull said the Coalition was largely in support of parts of the legislation including the shift from the current access regime and the moves to give the Australian Competition and Consumer Commission more power so that it can intervene in the telecommunications industry.
"The Coalition is also broadly supportive of those parts of the legislation which strengthen existing consumer protection legislation and clarify the operation of the Universal Service Obligation," he added. "The Coalition will reserve the right to move amendments in the Senate — particularly to any extension of retail-level safeguards and obligations onto wholesale service providers."
In a press conference held this afternoon, Turnbull was asked to explain why this position contradicted the statement put out by Telstra today welcoming the introduction of the legislation that will see it split.
"I think Telstra has reached a view that it needs to do it. I believe, and I always have believed ... that there was a very strong commercial case for Telstra to structurally separate its network. What we do object to is the government holding a gun to Telstra's head ... and saying 'we will use our power to stop you bidding for wireless spectrum unless you do what we want'."
"If the vertical integration of Telstra is a problem ... then separation, structural or functional, is the answer," he added. "But that does not require the destruction, the overbuilding of the existing Telstra network and the erection of a $43 billion new network.
"That is using a very large and very expensive sledgehammer to crack a nut," he said. "The government is well on the way to doing really terminal damage to Telstra," Turnbull said.
Following the introduction of the Bill this morning, Telstra shares briefly fell to a record low of $2.58.