Skepticism remains over Telstra split

Skepticism remains over Telstra split

Most ISPs are in support of the new telco reforms but some remain uninspired

Most Internet service providers (ISPs) have applauded the Federal Government’s proposed telecommunications reforms involving the structural separation of Telstra but some are still skeptical.

The new legislation will force the incumbent telco to split up its wholesale and retail operations as a way to end Telstra’s dominance in the industry. Despite years of resistance, Telstra said it is now open to talks of separation.

"It is Telstra's view that many aspects of this package are unnecessary and need never be implemented if a mutually acceptable outcome can be reached on the National Broadband Network [NBN],” Telstra CEO, David Thodey, said in a statement. "Telstra will carefully examine the package over the coming days."

Optus welcomed the legislation, citing it as a landmark decision that has the potential to radically change the telco industry and benefit all Australians.

“The Government has made its intentions clear. It is now up to the parliament, Telstra and the rest of the industry to ensure this long overdue reform becomes a reality,” Optus CEO, Paul O’Sullivan, said in a statement..

iiNet also embraced the proposed regulatory reforms. While still pouring over the legislative details, iiNet managing director, Michael Malone, said forcing Telstra to split and streamlining wholesale regulations will encourage competition and benefit customers.

“The big winner from these reforms is the Australian consumer who will be able to gain access to fast, affordable and competitive broadband services,” Malone said. “It should provide greater certainty for the telecommunications industry and encourage investment, innovation and jobs.”

Primus Telecommunications CEO, Ravi Bhatia, extolled the bill’s holistic approach.

He said it cleaned up the telco regulatory framework that had been in place for the past decade.

“It is addressing all the problems that were known but people were not willing to address for various reasons, including weak regulatory rules for wholesale services and the inability to prosecute Telstra for its anti-competitive conduct,” Bhatia said.

He saw the move to separate Telstra as a positive one for everybody involved.

“It is good for Australia, Telstra shareholders and for competition. It’s a win-win situation.”

Not all ISPs were elated to hear of Telstra’s imminent break-up. Exetel corporate sales manager, James Linton, greeted the news with cynicism.

“The structural separation of Telstra should have been done at the time of privatising Telstra and was a major error of judgment of the previous government based on crass ignorance of how telecommunications worked in Australia,” he said. “It is totally obvious that Telstra, particularly under Trujillo, blatantly misused its power and knowledge of other companies’ confidential information, witnessed in the two court determinations earlier in 2009, and did so almost from the first day of privatisation and doubtlessly continues to do so up to today.”

The Bill is set to be debated in Parliament in the coming weeks.

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Tags TelstraiiNetoptusExetelPrimus Telecommunications

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