Telstra 'monster' must be wrestled to the ground

It's not too late for the government to break up the "monster" that is Telstra via structural separation, according to leader of the Australian Democrats, Senator Lyn Allison.

Speaking today at an Australian Computer Society debate in Sydney, Allison called for the structural separation of Telstra and criticised the government, saying it had missed a chance in not splitting up the telco when it was still partially in government hands.

"The Democrats, like most in the industry, have been calling for that for some time," she said. "Structural separation would have been a lot easier if it had been done at the time [Telstra] was 50 percent owned by the government. However, it's not too late."

Allison labelled Telstra a "monster" and said the government's task of "wrestling it to the ground will not be a picnic".

The Democrats' leader added the government should consider making the regulatory regime increasingly uncomfortable so Telstra will accept a split without filing a class action suit.

Although Communications Minister Helen Coonan has shied away from backing structural separation from a government perspective, she has indicated that the expert taskforce monitoring bids to build Australia's fibre-to-the-node network may consider an enforced split as the rollout progresses.

David Kennedy, research director at Ovum, said a move towards structural separation would represent a change in policy direction for the government, but added that mandating structural separation could easily fall within the expert taskforce's remit.

"The terms of reference are so broad as not to rule anything out," he told ZDNet Australia.

Coonan's Labor counterpart has remained equally equivocal over the question of separation.

Labor deputy leader and communications spokesperson Stephen Conroy today also refused to commit on separating the telco in the event Labor wins the upcoming Federal election, adding that the party's planned partially government-owned fibre-to-the-node network should help allay industry fears.