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Telstra forced to split

Telstra forced to split

The Government will introduce new legislation today compelling Telstra to voluntarily submit an enforceable undertaking to the Australian Competition and Consumer Commission (ACCC) to…

The Government will introduce new legislation today compelling Telstra to voluntarily submit an enforceable undertaking to the Australian Competition and Consumer Commission (ACCC) to structurally separate.

If Telstra resists the changes, the legislation provides for the Government to impose a "strong functional separation framework" on the telco.

A statement released today by Senator Stephen Conroy previewed the "historic reforms", which coincide with the rolling out of the Government's $43 billion National Broadband Network.

"For years industry has been calling for fundamental and historic micro-economic reform in telecommunications. Today we are delivering this outcome in Australia's long-term national interest," Conroy said.

Under the new regime, Telstra will be restricted from pursuing its broadband strategy unless it dismantles its vertically integrated retail and wholesale arms.

Other bugbears for the Federal Government are Telstra's ownership of the remains of the hybrid fibre coaxial cable network and the company's financial interest in Foxtel.

The legislation will also reform the arrangements in Part XIB of the TPA so that the ACCC can address breaches of competition law and conduct damaging to the market. The ACCC will no longer have to consult with a party before issuing a competition notice; a process it claims was "previously prone to delay and obstruction".

The new legislation will be introduced into Parliament later today. Visit Lawyers Weekly for updates throughout the day.

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