Communications Minister Senator Richard Alston has ordered an inquiry into
splitting Telstra in half and selling its service businesses a proposal the
Government claims that it completely opposes.
The Government-controlled House of Representatives Committee on
Communications, IT and the Arts yesterday agreed to inquire into the mooted
structural separation of Telstra.
Structural separation is one of the key proposals that Labor is toying with
as an alternative to the Government's plan to privatise Telstra. Labor raised
the concept of selling profitable arms, such as mobiles, and retaining majority
government ownership of the network in its Reforming Telstra discussion paper
issued in May.
The Government, which opposes any structural separation of Telstra, is
confident the inquiry will expose the deficiencies of such a policy. ``It will
show up what we believe is a pretty weak policy," a spokesman for Senator
The Shadow Communications Minister, Labor's Lindsay Tanner, called the
inquiry a ``major backflip" and welcomed ``the Government's move away from its
obsession to privatise Telstra to consider alternatives".
The Government is adamant that the findings of the inquiry won't change its
opposition to structural separation. Treasurer Peter Costello has indicated the
Government hopes to introduce legislation for the full sale of Telstra into
Parliament early in the new year. The structural separation inquiry will not
conclude until August at the earliest.
The inquiry will examine the potential impact separation would have on the
efficient provision of services (particularly to the country), ongoing
investment in new infrastructure, and Telstra's ability to continue to provide a
full range of phone and data services. It will consider the wider impact of
structural separation on the telecommunications industry and the regulatory
regime. It will also assess the impact on Telstra's value, its shareholders and
the Commonwealth budget.
Meanwhile, the Australian Communications Authority reported that
telecommunications service improved last year a finding at odds with its recent
survey which revealed consumer dissatisfaction with services had doubled in the
The ACA reported Telstra is meeting the standard for connecting services and
repairing faults in 91 per cent of cases. Optus is meeting the required standard
95 per cent of the time.