Optus warns Telstra not to cheat

Optus said that it and the industry would be keeping a sharp eye on any separation plans Telstra put forward to the government.

The Federal Government announced today that if Telstra did not voluntarily structurally separate, a new telecommunications reform package would permit the government to impose an oppressive functional separation framework on it. Telstra said it was disappointed but resigned to the move.

The Australian Competition and Consumer Commission would closely examine anything Telstra put forward, and separation arrangements would also be put out for public consultation, Optus regulatory affairs general manager Andrew Sheridan told ZDNet.com.au. today. "There will be opportunity to say: look, there are some problems with this," he said.

Communications Minister Stephen Conroy would also be ready with the stick if Telstra wasn't realistic, according to Sheridan. "He's made it very clear to Telstra how he wants the market structure to be changed going forward," he said. "If Telstra doesn't play ball he's given himself some powers."

Separating the big telco will make it much easier for Conroy to deliver on his National Broadband Network promise, Sheridan said. "A structurally separated access company — Telstra — would be the ideal vehicle to take the national broadband network forward," he said.

Yet despite this incentive, Conroy had been nicer than he had to be, the Optus executive believed, by giving Telstra options. "He's done it in a way that also reaches out to Telstra," he said. "Not necessarily imposing something on Telstra."

Sheridan wasn't concerned about the level of power the minister had gained over the market. "Fundamentally, it's all about trying to deliver a level playing field. [The powers] look to be appropriate."

Optus felt the reforms were very positive for consumers and competition, answering issues which players such as itself had brought forward. "They're directly responding to concerns that many in the industry had raised," he said.