Turnbull OK with Telstra separation

Conciliatory tones from meeting with NBN Co chief.

Opposition communications spokesman Malcolm Turnbull said today that he would not object to the separation of Telstra to resolve problems caused by vertical integration in the telco sector.

In an apparent turnaround from earlier Coalition policy, which had seen the party delay debate on a Telstra separation bill and take separation off the table in its own broadband policy, Turnbull told the CommsDay Summit in Melbourne that he was in favour of separation to resolve competition concerns in the industry rather than the alternative - the NBN - which he described as "overbuilding and trashing" Telstra's network.

"The Government claims it will promote competition by eliminating the vertical integration of Telstra. It does this by overbuilding the entire Telstra CAN [copper access network], at public expense, and by contracting with Telstra to decommission its own network," Turnbull said.

"There is not an end, however, to monopoly. There is simply an end to vertical integration. 

"But in response we must recognise that if vertical integration is indeed the problem, then a structural or functional separation is the answer.
 
"In short – if vertical integration is the problem, the NBN is not the answer unless you believe in taking a sledgehammer to crack a nut.

"If Telstra were to decide to separate its network business as a utility... I certainly wouldn't object to that."

Meeting went well?

Turnbull and NBN Co chief executive Mike Quigley were cautiously positive when asked separately about the outcome of the first meeting between the pair last week.

"I think it went... pretty well," Quigley said.

"It was good, it was fine," Turnbull said.

Turnbull said he learned that NBN Co "hadn't prepared a business case [or] presented their business case even to their own board".

NBN Co today said the business case would be handed to the Government by the end of the month.

The conciliatory tone was short-lived, however, as Turnbull attacked Quigley for not justifying the costs of the network during a presentation to the summit earlier today.
 
"You've just had the chief executive of this business stand up and has not sought to justify the investment in financial terms at all," Turnbull said.

"He doesn't regard that as his job, frankly, because he says 'I was hired to build a network to connect 93 percent of Australians to fibre to the home, capable of delivering at least 100 Mbps...' So he's getting on with it.

"Where is the investment going to be justified?"