Conroy must stand firm in NBN negotiations with Telstra

Stuart Corner
Friday, 27 November 2009 05:53

Opinion and Analysis

In addition, remember that the Bill contains two quite distinct parts: the one dealing with structural separation of Telstra and the other a radical streamlining of the access and anti-competitive conduct provisions of the Trade Practices Act and strengthening existing consumer protection provisions in telecommunications legislation. Specifically: changes to the anti-competitive conduct regime in Part XIB of the Trade Practices Act, increased powers of the regulator under the access regime in Part XIC of the Trade Practices Act and tightening of the universal service obligation and the customer service guarantee.

These provisions were greeted with great enthusiasm by most of the industry - and were seen as addressing long standing failures of the competition regime. On one reading, a couple of months delay in them becoming law is of little consequence. However while they remain on the table there is potential for Telstra - which, not surprisingly does not share its competitors' enthusiasm - to negotiate away some or all of proposed changes.

Such a move is flagged as a distinct possibility in the Digest: "Whether the Government is minded to continue with [these proposed changes] is another matter...Telstra's opposition to the other measures in the Bill...might play out in the negotiations with the Government over structural separation."

While the Government does have a very strong hand, it by no means holds all the trump cards. Its commitment to the NBN, ostensibly with no involvement from Telstra, was a colossal gamble: a gamble that one way or another Telstra would get involved.

Having the legislation in place would have significantly limited Telstra's ability to wring from the minister questionable compromises in return for that involvement. Telstra's competitors are very alive to this possibility. The CCC issued a press release calling on communications minister, senator Stephen Conroy, to provide a guarantee that any deal offered by Telstra to structurally separate would be subjected to public analysis and approval by the ACCC.

Executive director David Forman, said: "With Telstra and the Government repeatedly saying that they are working toward a deal before Christmas, there is a grave risk that a deal will be done before the Bill can be brought back into the Parliament next year. The CCC calls on the Minister to give a rock solid commitment that he will find a way to prevent Telstra from by-passing the public scrutiny and ACCC approval that his Bill envisages."

Seems like the long parliamentary Summer recess could be filled with some pretty intense negotiations between the Government and Telstra. Merry Christmas Mr Conroy!