Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

As everyone in the telecommunications industry knows, Telstra's vertical integration has been the single greatest barrier to healthy competition in this sector. Today's approval by the ACCC implements the Gillard government's decision to structurally separate Telstra. It is a reform that previous governments have failed to undertake—first under the Hawke government, when it decided to merge Telecom Australian with OTC in the early nineties, and then compounded by the Howard government, when they privatised Telstra as the dominant vertically integrated wholesale and retail provider—until today.

These decisions have contributed to two decades of market failure in the telecommunications industry—a point made by the ACCC just last week. The ACCC said:

Telstra retains a dominant position in both retail and wholesale markets—

and—

despite the deployment of competitive infrastructure in some geographic areas over the past decade, on a national basis, competition for the supply of wholesale ADSL services is not effective.

This was the competitive environment that we inherited. The structural separation of Telstra is a watershed reform that will pave the way for competition in fixed-line telecommunication services for the first time in Australian history. It is a reform I have previously described as the Holy Grail of microeconomic reform in the telco sector. It is a reform that Telstra shareholders have voted for overwhelmingly, and it is one the industry had been crying out for.