Euphoric welcome for new telecoms legislation

Stuart Corner
Tuesday, 15 September 2009 13:02

IT Industry - Strategy

"We have been held back as a country, in terms of competition and we have been held back in terms of broadband," he said. "This legislation has the potential, I feel, to significantly change that dynamic. There is a real feeling that this is the piece of reform that needed to happen, and that it will now happen.

He added: "Tinkering around the edges [of the legislation] and fixing small bits in process and suffering through - as the minister pointed out 154 access arbitrations, multiple Federal Court and High Court appeals – that is not the answer...The answer has always been to fix the root cause, which is the incentives around Telstra's structure and their ability to bottleneck and control."
 
He described the impost on Telstra - structurally separate or face draconian consequences as "a masterpiece of incentive...carrot and stick thinking." (David Kennedy, research director at Ovum, said Telstra had been made "an offer it cannot refuse").

Despite the significant curtailing of Telstra's options - whether it chooses structural separation or enforced functional separation, Krishnapillai said Telstra would be well positioned to prosper. "There is still a big upside for them, to participate in the new (technology) world. They are still Australia's largest telco, they have the scale and they have the marketing and resources that if they choose to be positive, they will participate in what I think will be very significant growth in our sector."

Internet Industry Assocation chairman, Chris Hancock , also applauded the Government's initiative, saying: "The IIA has long called for this move. Last year we urged that nothing less than an open and competitive National Broadband Network (NBN) should be our goal and we regard the Minister's announcement as an important advance."

He added: "The clear lesson from the past eleven years is that the negotiate/arbitrate access regime has struggled to enhance competition and open access. The IIA regards the NBN as the future of the internet. As an essential facility it will underpin much of our social, economic and cultural development in the 21st century. It is therefore crucial we avoid repeating the mistakes of the past if we are to keep up with the rest of the world."

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