Telstra rejects telco regulations reform

A call for reform of telco regulations, including a proposal to limit Telstra's ability to bundle services was issued today by the newly incorporated Competitive Carriers' Coalition (CCC).

But Telstra has rejected the proposal, with a spokesperson saying bundling was driven by consumer demand.

As well as requesting reforms in regulatory policy to better support a competitive telco industry, the CCC wanted to limit Telstra's ability to bundle "monopoly services", such as line rental and local calls, with "contestable services", like mobile and broadband. The CCC also wanted public subsidies of Telstra to end, according to a press release.

According to the Telstra spokesperson, "these carriers are trying to achieve through regulatory chicanery what they can't achieve through competition."

David Forman, executive director of CCC, said the coalition -- which includes Macquarie Corporate Telecommunications, Primus, Powertel, Comindico and Hutchison Telecoms -- had set out its "action agenda" to make its concerns heard.

Forman said the nine-point agenda outlined the broader issues the telecommunications industry had to deal with and said, "(while) on some issues we will lobby for specific change, some (others) are just for debate."

The Telstra spokesperson said the telecommunications industry had been the most reviewed industry in the Australian economy for the past seven years. The spokesperson claimed that since competition was introduced in 1997 prices had fallen year-on-year.

"The proposal to limit carriers' ability to bundle services is basically a call for prices to increase and Telstra rejects that," the spokesperson told InformationWeek.

But Forman said that Telstra's size meant it was predisposed to anti-competitive behaviour.

"Telstra has the ability and the incentive to act in ways that are anti-competitive because they're too big."

He said that in reforming the regulator, "the bigger question is what made it possible (for Telstra to behave anti-competitively) and how can we stop them doing it again."

Forman said that while he realised in the pre-election climate it was unlikely that current government, opposition or minor parties would be looking to implement the CCC's recommendations, the action agenda was released to increase understanding of the issues and to provide guidelines on the basis of which to assess the best course of action and make appropriate changes.

Government's half-ownership of Telstra was "not an issue", Forman said. He said it did a "disservice to the government" to suggest that its ownership of Telstra meant it would deliberately allow regulations that hindered other telcos from competing fairly in the marketplace.

Forman said of the members of government: "They all know there has to be a change, they all acknowledge that and the agenda can help start a systematic process of change."

A review of telco regulations had been recommended by a senate committee last week and "after the election, it will have to be considered by the government," Forman said.

CCC is funded entirely by association members, and receives no government money.

However, Forman said that the association had had discussions with all relevant areas of government about the issues the CCC had raised and he was confident the wider government community supported and accepted these were issues that needed addressing.