Telco reform bill passes Senate


Labor’s controversial legislation to break up Telstra and restructure the telecommunications sector was approved in the Senate this afternoon, in a long-awaited move that the Federal Government has been pushing for for more than a year.

The bill — first introduced into parliament in 2009 — provides for the long-awaited structural separation of Telstra’s retail arm from the rest of the company, but has been amended to reflect the agreement between Telstra and NBN Co on how the telco will transition its customers onto the National Broadband Network as the fibre is rolled out around Australia.

In addition, the legislation, according to Labor, will strengthen the regulatory access regime to provide more certainty to telcos, streamline the anti-competitive conduct regime, and strengthen consumer safeguards such as the Universal Service Obligation and the Customer Services Guarantee.

It has been the subject of fiery debate in parliament several times over the past year, including an especially vitriolic period over the past week as Labor, facing a Coalition decision to reject the legislation, wooed the Greens and independents to get the legislation over the line.

Communications Minister Stephen Conroy immediately welcomed the move, labelling the bill “an important microeconomic reform” that would transform the nation’s telecommunications sector and “correct the mistakes of the past two decades”.

“Telstra and NBN Co can get on with finalising Definitive Agreements which allow NBN Co to access Telstra’s infrastructure and migrate its customers onto the NBN,” Conroy said in a statement, noting the legislation would now need to pass through the House of Representatives on Monday.

The Communications Minister also took a moment out to criticise the Coalition for not supporting the bill.

“The Liberals and Nationals have shown their complete disregard for Australian consumers by refusing to support this legislation,” he said. “The Liberals and Nationals have shown they are only interested in delaying and demolishing the NBN. They have no regard for the millions of Australians who are paying too much for poor services.”

Conroy’s opposite, Shadow Communications Minister Malcolm Turnbull, also took a last minute chance this afternoon to criticise the Government for not agreeing to conduct a cost/benefit analysis into the NBN.

“There are some very worthwhile reforms in this legislation with which we agree,” said Turnbull in a statement. “But the legislation cannot be separated from the NBN project it is designed to facilitate.”

“We can all agree about the merits of structural separation or indeed of universal and affordable broadband. But the elephant in the room is the $43 billion (or is it more like $50 billion?) National Broadband Network which, as the Treasury advised the Government recently, poses real risks to the public balance sheet and creates real threats to competition.”

David Kennedy, a research director at analyst firm Ovum, said in a statement that attention would now focus on the negotiations between Telstra and NBN Co over the transfer of Telstra’s customers onto the under-construction NBN as it was rolled out.

“The NBN Co business case stated that December is the target for a completed deal. This is an ambitious target,” he said. “If achieved, it will clear the way for shareholder consideration of the deal in the first half of 2011. This will be the final step in the biggest telecommunications reform since full competition was introduced in 1997.”

Image credit: Office of Stephen Conroy


  1. Well, at least the disaster that was the merger of Telecom and OTC in 1992 has finally been undone. Over to Telstra, NBN Co, and the Telstra shareholders now!

  2. The Opposition tried to delay it, right to the end. If they have something useful to contribute, I wish they would.

    I noticed on an ABC article about this legislation passing, that there appears to be a move to confuse the NBN with Internet censorship, e.g. (paraphrasing) “The NBN and the filter are the same thing” and “If you want the NBN then you get the filter”. There were several very similar comments, where the moderator’s question had nothing to do with the NBN (it was, “How will this structural separation affect Telstra shareholders?”).

    I can’t see how this kind of disinformation helps anyone, but hopefully we can dispel it where it occurs.

    Of course, Conroy could help by dropping the egregious filter proposal entirely. That would be a vote for common sense. ;)

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