Structural Separation: Conroy's second big surprise

Stuart Corner
Tuesday, 15 September 2009 11:33

Opinion and Analysis

The legislation announced today by communications minister Stephen Conroy goes further than most of the industry had expected "I keep checking that the date isn't 1st April" one CE commented). It's the second big surprise the minister has pulled out of the hat this year.

At a door stop press grilling in March - with the winner of the NBN Mark 1 RFP expected to be announced any day - Conroy was adamant that the process was on track and such announcement would be made. A few weeks later he surprised the industry by scrapping the whole thing and announcing the $43b NBN mark 2. http://www.itwire.com/content/view/24296/127/ Now, he has done it again: after proclaiming his Government's aversion to the structural separation of Telstra, he haso introduced legislation with that as a likely outcome.

In late May the Australian telecoms industry was treated to the rare sight of a shadow minister coming out in support of the shadowed: shadow communications minister, Nick Minchin, issued a press release headed: "Structural separation of Telstra not supported by Labor or the Coalition."

He said it was clear that neither the Rudd Government nor the Coalition was advocating the structural separation of Telstra. To support his claim that Labor was not in favour of structural separation Minchin provide an extract from the Senate Estimates Hansard in which he grilled Conroy on the question and where Conroy said that this was option was not canvassed in the regulatory reform discussion paper.

This came at a time when the issue of structural separation was headline news with Optus busy lobbying on the basis of its regulatory reform submission advocating structural separation.

I analysed the Government's regulatory reform discussion paper and concluded that, while structural separation was mentioned, it was not seriously considered to be an option.

In fact what Conroy said in the Estimates hearing is, after a fashion, has now delivered: Minchin asked: "You are not prepared to rule out structural separation?" To which Conroy replied: "It is not in the [regulatory reform discussion] paper. I do not believe I have ever advocated it. Telstra may volunteer it. Who knows? …."

Well that's pretty much where we are today: if by volunteer, you mean Telstra has been made offer it cannot refuse.