It sounded like the Telstra of old, under the former management of Sol Trujillo.
It said Friday it was opposed to the federal government’s proposal to split it, and has called for the senate to delay debate on the bill until its negotiations with the government are complete.
In a submission to the Senate inquiry into the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 released on Friday, Telstra said the legislation was unnecessary.
Under the bill introduced to parliament in September, Telstra faces the structural separation of its wholesale and retail businesses – by either voluntary or forcible means.
The proposal is aimed at creating a more level playing field ahead of the build-out of a high speed national broadband network (NBN).
But the submission in fact reads like a negotiating document, rather than an outright rejection.
The submission sort of said ‘no’ or, more accurately, ‘hold on, we’re still talking, so the bill isn’t needed’.
A separate, one page statement said that Telstra supported the National Broadband Network
"I want to stress that while Telstra continues to support the Government’s vision for the National Broadband Network (NBN), we believe that this bill is unnecessary and makes it harder for the government to achieve its objectives for the NBN," Telstra chief executive David Thodey said in the statement.
"Telstra has no choice but to oppose the passage of the bill in its current form.
"If the Government decides to proceed with the bill, we believe that it is only sensible that the Senate delay debate until after the conclusion of constructive discussions between Telstra and the Government over the NBN and the completion of the government’s NBN implementation study.
"We would also urge that significant amendments are made to the bill."
If it is still negotiating with the federal government, it is still in fact talking to the Rudd Government about some sort of deal.
”Telstra continues to negotiate with the Government in a positive and constructive manner on the NBN. The Telstra Board and management have consistently stated that we can only agree to proposals that represent fair value to shareholders, and which protect the interests of our employees and customers,” Mr Thodey said in his statement.
The market was a bit uncertain, the shares fell 7 cents to $3.16 on Friday.
Telstra promised the submission in a statement on September 29.
In its submission, Telstra said the bill would impede the achievement of the NBN, reduce competition, harm consumers and destroy value for the about 1.4 million Australians with Telstra shares.
The Rudd Government has indicated it wants its negotiations with Telstra completed before the end of the year.
An NBN implementation study is due to be completed in early 2010.
In its submission, Telstra said the government’s bill is premised on the "erroneous assumption" that competition has failed in the telecommunications sector, primarily due to Telstra’s vertical integration.
"On the contrary, competition has not failed and the casual use of the term ‘dominance’ to describe Telstra’s market position is misleading," Telstra said.
The real failure in the industry is in investment, it said, with market participants simply not making enough capital investments in high-speed broadband.
Telstra is "ploughing far more than its share" into capital to meet the future needs of the telco market, it said.
Telstra repeated its claim that overseas examples of functional separation proved less than successful.
It said separation would divert Telstra management’s attention and resources away from migrating assets to the NBN.
"In brief, the bill needs to be amended to ensure functional separation is not unreasonably burdensome on Telstra shareholders, does not put at risk customer service and does not impede the transition to the NBN," Telstra said.
The company said it is opposed to proposals to enforce structural separation, deny it access to wireless spectrum and the divestiture of its 50 per cent stake in Foxtel if functional separation is not agreed to.
The company’s second largest shareholder, Australian Foundation investment Co, last week indicated its unhappiness with the government’s proposal and provided a form letter for shareholders to download from its website and send to the government.
That letter said in part for shareholders:
"I acquired my shares in the company in good faith and at full value based on the current regulatory environment which allows the company to operate as a fully integrated telecommunications company.
"The proposed new framework seeks to penalise Telstra for being highly successful in its current structure.
"In penalising Telstra you are also penalising its many shareholders such as me who bear the brunt in the loss in value that results, the AFIC letter read.
"The Government seems determined to go down a path of structural separation of the company, yet as far as I am aware, every example of structural separation taken elsewhere in the world has resulted in tremendous loss of value for the affected shareholde
