McMullen told a conference in Sydney the central issue for the telecommunications market was whether Australia would experience the competition needed to drive innovation if one player continues to dominate the sector.
McMullen and Lindsay Tanner, the Shadow Minister for Telecommunications, are doing the rounds trying to convince the telecommunications industry the debate needs to shift to whether the retail arm of Telstra should be separated from the network.
"The debate is only about whether the vertically-integrated monopolist should be publicly or privately owned, not whether we should have a monopolist," said McMullen. "The telecommunications debate needs to move on, it's stuck in a 1980's rut. The important thing is not the ownership of Telstra but its structure."
The structural separation of Telstra is a line that has been pushed by Labor since the release of Tanner's white paper, Reforming Telstra, but so far they haven't managed to engender the debate they claim is needed on the issue. The Federal Government has so far managed to keep the debate focussed on the level of Telstra service in rural Australia.
The Federal Government claims a monopolistic Telstra can be avoided by accounting separation, which forces Telstra to make the prices it charges it retail division and wholesale customers more transparent, and separates the accounting schemes of the two operations.
McMullen said he is not convinced that accounting separation is sufficient to guarantee an effective level of competition. "[The Government] should be seeking ways to open up Telstra to drive the benefits for the whole economy of a more competitive telecommunications industry," he said. "I am unequivocally of the view that structural separation of the network from the retail arms is clearly the best option.
"The only question is whether the partial privatisation of a vertically integrated Telstra has destroyed the opportunity to achieve it." He admitted a significant number of people who agreed with the idea of the structural separation of Telstra think that after the partial sale of Telstra, it is simply too late to refocus the debate.
T(H)elstra and the Liberal Government will do everything in their power to prevent the separation of the retail & Infastructure arms of the monopoly stranglehold T(H)elstra maintains over the countries telecommunciations.
Both The Feds and T(H)elstra need to maintain the monopoly until T(H)elstra is sold off completely, to ensure a better deal & return. When that is accomplished it will be too late to separate or break up the operation.
In the mean time and beyond, we will continue to languish in the back blocks of world communications, with overpriced Telecoms and inferior technology.
I wish the Opposition parties lots of luck, but I'm not holding my breath.