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ACCC's Samuels endorses Telstra break-up

Australian Competition and Consumer Commission chairman Graeme Samuel yesterday endorsed Telstra's structural separation, which has drawn strong criticism from the Liberals.

Speaking at the ATUG 2009 Regional Conference in Canberra yesterday, Samuel gave the thumbs up to Communications Minister Stephen Conroy's plans to separate Telstra's wholesale and retail networks.

ACCC chairman Graeme Samuel
(Credit: ACCC)

"The vertical integration of Telstra has been one of the most substantial regulatory issues facing the Australian telecommunications industry. It has significantly constrained competition," he said.

"As the government moves to implement its announcement, now is the time to get the ground rules right on structure, to support robust competition in the sector in the coming decades."

"Now is the time to get the ground rules right on structure, to support robust competition in the sector in the coming decades," said Samuels.

The comments came as telecommunications industry submits proposals for telco industry regulatory reform on 3 June.

"We have a unique opportunity to redefine the telecommunications industry, but hard work will be required to get the settings right," said Samuel.

Samuel's comments, however, have drawn strong criticism from Shadow Minister for Communications Nick Minchin who said that he had "overstepped the mark".

"With great respect to Mr Samuel, I think he's overstepping the mark quite frankly. He is the regulator, not a policy maker and he has the job of regulating the industry. If he wants to change his focus, then perhaps he should consider standing for parliament," said Minchin.

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Talkback 32 comments

    typical samuel Anonymous -- 22/05/09

    Why does anyone even quote this guy anymore? he just spouts the same stuff over and over again.

    He has an obvious and massive anti-telstra bias.

    typical samuel Ronald E -- 26/05/09 (in reply to #320137351)

    Must be time Samuel retired, listening to him is like having your head under a dripping tap.

    The best thing Optus has got going fot it are 2 racoons and a giraffe.

    Anti Telstra Bias from ACCC Anonymous -- 22/05/09

    Minchin is right he has overstepped the mark!!

    If this is what the position is then THODEY should walk away from the table NOW!!

    OR

    IS he on in on the Krudds/Conjobs plans to "break up" a great aussie company for these commie loving socialists for the sake of Singtel/OPTUS and other foreign owned interests!!.

    Thats it scew the TAXPAYER some more KRUDD and give some more free kicks to SINGTEL/OPTUS!!

    Re: Anti Telstra Bias... RL -- 22/05/09 (in reply to #320137378)

    If this will give us competition on an open and equal playing field, along with 100Mbps to 90% of the Australian population, and make Australia number one in the world in "intelligent infrastructure", then this is a price that we Australians are willing to pay.

    http://www.theaustralian.news.com.au/story/0,25197,25504325-5013871,00.html

    Third world we're here (almost). Sydney Lawrence -- 23/05/09 (in reply to #320137378)

    Only problem for the standover, dominating, selfserving and Australia destroying ACCC is the strong possibility that Mr Rudd's could be a one term government. Roll on the election.

    deja vu Anonymous -- 23/05/09 (in reply to #320137515)

    what, roll on the election so that soon after, you can copy/paste everything you are now saying about rudd, but just change the name to turnbull. like you did before from howard to rudd, lmao.

    you telstra shareholder stooges really are something

    Telstra Matt -- 23/05/09 (in reply to #320137378)

    The network the Australian public paid for should never have been sold off! Telstra should have been functionally separated from the start and just the retail arm sold off.

    If that had happened, access and maintenance costs could have been charged by the government and we wouldn't need to now be funding an NBN, as the government would already own one. Because Telstra, your "commie loving socialists" and whom ever else, would have funded new infrastructure in the city and in the bush and us tax payers would not be in this situation being screwed for more money.

    Re: Anti Telstra Bias..., i.e. Telstra Bias Anonymous -- 30/05/09 (in reply to #320137378)

    The foreign-owned, locally employed, other networks here don't make any profit, and have brought billions into Australia, effectively passing on products and services at cost price to aussies- so the fact they are foreign-owned is a good thing to Australia. Until the day when they withdraw from the market, which they will only do if Telstra continues to run the industry, and be the only ones to benefit from the taxpayer.

    Meanwhile, Telstra screws Aussies by charging double prices thanks to the fact taxpayers built their networks pre-privatisation, and then they ship some of that cash into China and other overseas investments, resulting in Aussie money going abroad- the opposite to SingTel, Vodafone & Hutchison.

    Which one is screwing the taxpayer & consumer, and which ones are better for Australia?

    Bring on the day when the other companies have invested (on their own accord- thanks to foreign investment) in better networks, meaning Telstra can no longer screw us over just because their (or the taxpayers) network "works better in more places".

    Telstra need to be updated Anonymous -- 22/05/09

    Telstra, a pitifully badly run company, need to be split into two - infrastructure separate from retail products. http://cli.gs/JEVjaU

    They've held back communications technology about two decades - what we have now is overexpensive and junk.

    More like pro Telstra comments Steve N -- 24/05/09

    I can't wait to see Telstra structural separation, Telstra has always been anti competative and un Australian...To much right wing s**t in these comments,your all nuts.

    Time to fess up ACCC. Sydney Lawrence -- 24/05/09 (in reply to #320137600)

    If Steve N would be so kind as to reveal his true identy and his anti Telstra motives, we would probably find that he has reasons to want Telstra weakened which are probably linked to Telstra opponents.

    Why cannot the Rudd Government, or indeed any other Telstra opponent who wishes to compete with Telstra, invest the required money and compete. Why do they demand the destruction of Telstra before they invest?

    Can anyone explain how the ACCC, who is supposed to be the champion of competition, can call for regulation that bans competition and in fact will create a monopoly in the industry.

    cut the cr*p and gain a little respetc Sol Fajita -- 24/05/09 (in reply to #320137613)

    before steve n fesses up why don't you tell us all about your pro telstra, true identity (those shares) sydney.

    if you'd have made the above comment without all the typical sydney crap, true identity, anti telstra motives linked to Telstra opponents and just started from paragraph two, you'd have and will, gain more respect.

    Sydney says Telstra has a monopoly! Phil -- 25/05/09 (in reply to #320137613)

    Sydney, you're effectively saying Telstra has a monopoly with that argument. Structural separation would not involve the infrastructure of any competitor, only Telstra's. If that creates a monopoly, the only logical conclusion would be that Telstra currently has that monopoly!

    When Telstra was privatised, it was done so with regulated access requirements for competitors, allowing them to compete without the need for investing in their own infrastructure. When Telstra actively works against these conditions (delaying access to exchanges, proposing unrealistic charging schemes, etc) why shouldnt we call for greater measures to ensure more competitors can break into the market, and existing competitors are able to thrive?

    Monopoly Myth!! Anonymous -- 25/05/09 (in reply to #320137926)

    refer to the real reason. I am sure you agree Sydney.

    http://www.nowwearetalking.com.au/blogs/the-telstra-phile/optus-needs-a-mirror-to-diagnose-market-failure

    hoorah! Anonymous -- 24/05/09

    This is great news. We might actually get some proper competition in Australia and bb speeds that are faster than those in Africa for a change. Telstra has had a free ride for too long and thanks to the truly shocking behaviour of its appalling American management, it is getting exactly what it deserves. I feel sorry for David Thodey inheriting the mess that Sol and his cronies left behind, as he's a good man, who knows how to treat people decently and has a high level of integrity (something sorely lacking at Telstra over the last four years). And no Sidney, I am not a communist Chinese spy or an employee of Singtel.... I just like good telco services sold to me at a fair price

    hoorah x 2 Anonymous -- 24/05/09 (in reply to #320137640)

    i agree but only if optus is separated too!

    lets not get rid of one gorilla just to create another.

    Optus Simon -- 25/05/09 (in reply to #320137648)

    I didn't realise Optus had it's own pstn??

    Sol and his legacy Anonymous -- 26/05/09 (in reply to #320137640)

    Do you realise Sol has absolutely canned Australia calling us backward and racist. Its a great line when the same place has helped you become the fattest of cats and watched on while shareholder value has been halved and the reputation of Telstra effectively shattered. The facts are that Telstra is too expensive and they hide behind a raft of nonsensical arguments suggesting that competitors have unfair pricing advantages - well the answer to that is to compete. Lower your prices , offer much higher bandwidths and downloads and people might see Telstra as being more responsive to what the public is now saying they want. Australia is fast becoming the banana republic .. we apparently just did not know it at the last election . I don't own Telstra shares , I don't love Optus and I am NOT politically affiliated . I am a free thinker and Telstra has done its best to alienate and aggravate a lot of Australians - the monthly billing change being one big irritation to me in particular. I have now gone elsewhere purely because I cannot get a decent internet service , the landline costs are too expensive and I wanted a 3 monthly billing cycle. See customers do still matter Mr Thodey .. lesson number 1 in managing an Australian focused telco.

    Ken

    methinks Anonymous -- 24/05/09

    Nick Minchin might have Telstra shares. Because Coonan would probably have done the same if Howard was re-elected (now there is a funny thought)- and broken up Telstra (giving copper line access to OPEL).
    Nick Minchins position clearly departs from previous coalition policy to the extent that we all have to ask - does Nick Minchin, his wife, dog or trust fund own Telstra shares?

    @methinks Sol Fajita -- 24/05/09 (in reply to #320137651)

    nick probably has telstra and coonan probably has or had optus shares. ah it all becomes clearer.

    Go Telstra, Go Australia. Sydney Lawrence -- 25/05/09 (in reply to #320137651)

    Anonymous why do you show your lack of knowledge of the situation.

    EVERY Australian, man, woman and child has a financial interest in the well being of Telstra. How?. Simple.

    The 1,500,000 Aussie Telstra shareholders. The 35,000 Aussie Telstra employees. Every Aussie with a Superannuation Fund. Every Australian through their ownership of the 16% of Telstra shares held for them in the Future Fund.

    So you see Anonymous even you have a vital interest in the future of Telstra.

    Future fund? Simon -- 25/05/09 (in reply to #320137896)

    There's no longer 1,500,000 Australian shareholders as your Mums and Dads are cutting their losses and selling them off.
    My super fund (thankfully!) dumped them early last year as they have not performed now for years. I'm sure most other funds have done the same or they would not be doing their due dilligence for their customers and shareholders.

    The Future fund is only for Commonwealth public servant's superannuation, started as the Howard Govt had not made adequate provisions for some time. (made the surplus look bigger!)
    So really, Telstra doesn't really spread that far at all, maybe 20% of Australains?

    Settle Uncle Sydney Jason -- 25/05/09 (in reply to #320137896)

    Come on Uncle Sydney, come down from your Telstra sponsored soap box, now .

    No one said we don't have an "indirect" interest. You show your lack of knowledge and an inability to understand. As well as an obvious, unhealthy and shameful financial bias towards Telstra! But everyone already knows that, so it really goes without saying.

    Sydney, unlike you, most of us do not have a "direct" share holding interest which forces us to whinge, whine, sob at their pitiful performance and carry on like a spoilt child, because we just aren't willing to admit how stupid we were to gamble our finances on Telstra.

    But although we do have an indirect interest in Telstra, we probably also have an indirect interest, via super, in BHP, Commonwealth Bank, Wesfarmers and many others. Others; possibly including SINGTEL OPTUS and iiNet too! If so, that would pretty well negate your argument, eh Sydney.

    So you keep pushing Telstra, only because your finances depend on you to do so every day and I'll keep my open mind, thank you.

    "Sydney Lawrence" Anonymous -- 26/05/09

    Ah, the wonders of modern communications.

    We've put up with "Sydney Lawrence" horsefeathers for the past four years, and now we seem to be still getting them from the good ol' US of A. ROFL

    But where's investment going to come from? NicF -- 27/05/09

    I have a question then, and while I consider myself mildly pro-Telstra, I'm trying to ask from a non-biased position-

    If Telstra's network arm is spun off, and there is no longer any subsidy from the retail arms to provide funding and investment for the network upkeep and ongoing development and new building, how exactly is the new company who's given that task going to afford it?

    I honestly dont think that a new, network-only company can run on the same price that Telstra's currently restricted to on the network. If they could, that'd be great, but I honestly don't see it happening. You only have to look at Telstra's financial results to see how much money is being lost internally through the network arm which isn't made up from the Wholesale sales, and that is all money that won't be available for the new Network company if the breakup ever occurs.

    NicF? Anonymous -- 27/05/09 (in reply to #320138531)

    if you are nic fra....t who works for telstra and frequents nwat, you are more than mildly, pro.

    but either way your point is echoed by commsday.

    Australia is awake to the tricksters. Sydney Lawrence -- 28/05/09

    Goodness gracious me the tricky and disingenuous attempts by the phantom and carleton anti Telstra posters who hope to gain commercial advantage for Telstra opponents is doomed to fail as the Australian people increasingly awake to their sneaky plan.

    They claim to desire competition but in reality hope for regulation that will damage Telstra and create unfair advantage for them. Their plan is understood, and I am sure GMH would like a regulation that ruled that Ford could only produce vehicles with three wheels.

    So it is with the draconian regulation that the ACCC is proposing to introduce to damage Telstra, help Telstra opponents and in reality destroy competition. Hopefully, the Australian people who are watchful of what is happening to this Australian company will react accordingly.

    Damage Anonymous -- 04/06/09 (in reply to #320138949)

    How can Telstra be any more damaged than it already is?

    What are you on Sydney? Simon -- 04/06/09 (in reply to #320138949)

    Why do you always go on about this weird conspiracy theory rubbish about mythical and clandestine enemies of Telstra? Seriously, you should get medical advice before your paranoia overtakes you and ruins your life.

    unfortunately - Anonymous -- 04/06/09 (in reply to #320141102)

    too late!

    Separation is needed for competition policy Graeme Harrison (prof at-symbol post.harvard.edu) -- 02/06/09

    Samuels is only saying what any rational observer has seen over the years... that Telstra has proven itself incapable of allowing fair competitive access. The alternative is to give every Telstra shareholders a share in AusBroadband Ltd and let it be the continuing owner of the long-lines/backbone. I suspect that Telstra shareholders would actually be FAR BETTER OFF. Yes, they would not have a complete monopoly... but they never had (Telstra having had competitors since before they bought shares in the company)... but they will end up with a good share of the NBN, which otherwise they are excluded from.

    There is no way any 'notional separation' can work. The events of the past three years prove that it must be an actual separation. Yes, there would be a little bit of duplicated corporate overheads, but there would be two businesses each concentrating on what they do best. The benefits (even to shareholders) may outweigh the risks. And for national competition policy to work, it MUST be done.

    complete separation is vital Anonymous -- 14/06/09 (in reply to #320140876)

    Australian fixed-line communications have been a bad joke for far too long. Endusers have endured low technical and service standards and have been absolutely screwed on cost.

    As Graeme Harrison says above "there is no way any 'notional separation' can work". The dominant monopolist corporation will continue to use its huge cashflow to create legalistic barriers to competition until the government says 'enough is enough".

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