Turnbull reveals telco reform terms

Shadow Communications Minister Malcolm Turnbull has revealed the cost of the Coalition's cooperation in getting Labor's wide-ranging telecommunications legislation through the Federal Parliament: a handful of amendments aimed at protecting both Telstra and Australian consumers.

Last week Labor finally reintroduced its controversial Telecommunications Legislation Amendment (Competition & Consumer Safeguards) Bill 2010 after it had previously been stonewalled in parliament prior to the Federal Election.

The Bill provides for the long-awaited structural separation of Telstra's retail arm from the rest of the company, but has been amended to reflect the agreement between Telstra and the National Broadband Network Company (NBN Co), which settles how the telco will transition its customers onto the National Broadband Network as the fibre is rolled out around Australia.

In addition, the legislation, according to Labor, will strengthen the regulatory access regime to provide more certainty to telcos, streamline the anti-competitive conduct regime and strengthen consumer safeguards such as the Universal Service Obligation and Customer Services Guarantee.

In a statement yesterday, Turnbull said that the Coalition supported the Bill's introduction of a new and more certain pricing regime by which telcos would gain access to each other's infrastructure — particularly Telstra's. However, the Coalition wants four major changes to the legislation that would:

• Ensure the Competition & Consumer Act (formerly the Trade Practices Act) applies to the $11 billion deal between NBN Co and Telstra
• Ensure the parliament is able to disallow ministerial directions to the national competition regulator, the Australian Competition and Consumer Commission (ACCC), regarding the deal
• Remove the provisions in the Bill that threatens Telstra with losing the right to bid for wireless spectrum, being forced to sell its hybrid-fibre coaxial network or offload shareholding in pay TV operator Foxtel if it does not structurally separate
• Restore what Turnbull called "merit reviews and procedural fairness" to the ACCC's enforcement of the new access pricing regime

The Coalition has previously been against the separation of Telstra into separate divisions to deal with retail and wholesale customers, but Turnbull said that in the context of the new legislation, such a separation would be "a welcome development".

"The Coalition therefore has no objection to Telstra separating its retail and network businesses, but does not believe such a separation should occur under duress, or via a deal that is in breach of the nation's competition laws," he said.

Conroy's response

Communications Minister Stephen Conroy didn't appear to be happy with the Coalition's conditional support for Labor's legislation.

In his own statement, the Labor heavyweight claimed that the Coalition's move represented the fact that it had "dumped the failed broadband policy it took to the election".

"It appears the Opposition is changing its position on broadband despite Tony Abbott claiming just weeks ago that changing their policy is not a trap he'll fall into. It seems he's fallen in and he should release the details," Conroy said.

Turnbull had acknowledged that the NBN project would achieve structural separation of the telco sector, but at what he called "an enormous and unnecessary cost and risk to the taxpayer".

However, Conroy demanded the Coalition answer the question of how much the separation of Telstra would cost taxpayers without the NBN project, and why Telstra would agree to such a deal without the incentives offered by its $11 billion deal with NBN Co. "While the Opposition dithers with one failed broadband plan after another the Gillard Government is getting on with delivering the NBN," he said.