Communications Minister Stephen Conroy has rejected pleas from Telstra and shareholders to delay the passage of legislation aimed at splitting the telecommunications company.
Yesterday, Telstra and several institutional investors argued that the legislation should be delayed until after the NBN Implementation Study is complete.
In an assertive speech made to the CommsDay summit in Melbourne, Conroy said he would not give the carrier any more time to negotiate a better position with the Government.
"We remain absolutely committed to debating and passing this legislation before the end of this year," Conroy said. "The time for action is now."
Conroy said the legislation is required regardless of the National Broadband Network.
"The existing regime has failed, over many years, to deliver the right competitive outcomes for Australian consumers and businesses," he said.
Conroy said the current regulatory model "is prone to delay, gaming and uncertainty for all parties."
To illustrate, Conroy said that there had been only three access disputes in airports, energy and other regulated industries since 1997. Within the same time frame, there were 150 disputes in the telecommunications sector.
"The fact is, that after eleven and a half years of inactivity in government, Nick Minchin and the Liberal Party have a single policy platform - delay," Conroy said. "Delay to hide the fact they have no other position."
Short memory
Conroy also slammed Telstra investors over their calls for more delays.
Telstra investors, he said, suffered far more under the antagonistic leadership of Sol Trujillo than they have since Conroy's amendments were proposed.
"Some large institutional investors have expressed surprise at our recent announcements," he said. "It is difficult to understand the analysis of some of these commentators. Under the previous Telstra management, the Telstra share price fell almost 40 percent from when Sol Trujillo was appointed to his departure announcement [$5.10 to $3.15].
"Did we hear anything from these large institutional investors during that period? Where was their public campaign questioning the strategy of the previous Telstra management at that time?"
Conroy pointed out that several financial analysts have pointed out the opportunities the legislation might provide Telstra.
"Bloomberg analysis found that found that out of 17 brokers who cover Telstra, 11 recommended a 'buy' and only three recommended investors a 'sell'," he said.
Industry support
Industry representatives appearing before a Senate Inquiry into the Telecommunications Amendment Bill also rejected calls for delays.
David Forman, executive director of the Competitive Carriers Coalition said the arguments to delay the legislation "don't wash."
"The time has come for this industry to be exposed to the disciplines of real competition," he said.
Rosemary Sinclair, chair of the Australian Telecommunications User Group (ATUG), said she would prefer Telstra to voluntarily separate.
She said ATUG is "keen for discussions to conclude and a win-win for Government and Telstra."
"We don't see any reason for those discussions to be a cause of delay of this legislation," she said.
The legislation offers incentives, she said, for Telstra to act in such a way that results in "good outcomes" for consumers. This incentive is removed should the legislation be delayed, she said.
Sinclair also said it was not improper nor without precedence that the Government use next generation mobile spectrum auctions as leverage in the market.
Sinclair said the ACMA (Australian Communications Media Authority) has the power to not include a player in spectrum auctions if the competition watchdog (ACCC) has concerns over competition.
She said there has never been a guarantee any player would be allocated spectrum.
Issue: 283 | September