The Coalition policy means that the recent $11 billion agreement Telstra signed with Government and the NBN Company to voluntary separate its wholesale and retail businesses would sink without a trace, allowing to Telstra to continue to operate as a vertically integrated provider.
The deal, which had been negotiated for nearly a year and resulted in a non-binding agreement signed six weeks ago, would have seen the eventual closure of the Telstra copper network with Telstra's retail arm becoming a customer of the NBN Company's wholesale only national broadband network.
Meanwhile Telstra's chief competitor Optus has welcomed the release of the Coalition broadband policy, but questioned how it will address the structural problems in the industry.
Specifically, Optus director of government and corporate affairs Maha Krishnapillai said that while the Coalition policy addressed backhaul bottlenecks, it would still enable Telstra to dominate the industry through its ownership of the "last mile" copper connections to homes and businesses.
"Ownership of the copper network, the only fixed access connection for the vast majority of Australians, has allowed Telstra to undermine competition and dominate the fixed line sector to the detriment of consumers," Krishnapillai said.
"It is not clear from the Coalition's policy how this bottleneck will be resolved, but we look forward to future constructive discussions with the Coalition on this matter."