Telstra will escape a carrier license condition to mandate the production of phone directories in Australia.
A Senate Committee examining the proposal — which was aimed at preventing Telstra offshoring production work — ruled late Friday that it would not intervene, citing trade and commercial concerns.
Committee chair and Liberal Senator Simon Birmingham said Telstra "should, as far as possible, be able to make commercial decisions about their operations (even where such operations are required of them by government)".
He also said consideration had been afforded to claims by the Department of Foreign Affairs and Trade (DFAT) that a carrier license enforcing production work could put Australia in breach of various free trade obligations to which it was a signatory.
Labor Senators on the committee disagreed with its majority assessment of the carrier license conditon proposal, saying the potential impact on trade was "overstated" and intervention was justified "to address a market failure".
"In our view, the government should give careful consideration to extending the license requirement for Telstra to produce directories; to require that they be produced in Australia; to protect Australian jobs in the public interest and, as a measure, to take account of changed technology and consumer preference," Labor Senators said.
The inquiry was rooted in a bid by the Greens to keep Sensis jobs in Australia.