The Federal Government recently introduced the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 (Bill) into Parliament, which proposes significant changes to the telecommunications industry in Australia.

The Bill proposes to, amongst other things, improve competition in the telecommunications markets by addressing Telstra’s vertical and horizontal integration, and seeks to achieve this by:

  • requiring Telstra to separate its network/wholesale and retail businesses (if it does not do so voluntarily), and
  • preventing Telstra from acquiring additional spectrum for advanced wireless broadband unless it structurally separates and divests its cable network and interests in Foxtel. (The requirements to divest the cable network and Foxtel interests may be removed if the relevant minister is satisfied that Telstra’s separation addresses the concerns about the degree of Telstra’s power in the telecommunications markets).

The Bill also seeks to:

  • amend Part XIC of the Trade Practices Act to improve the efficiency of the telecommunications access regime and make it less vulnerable to procedural delays
  • amend Part XIB of the Trade Practices Act to streamline the telecommunications anti-competitive conduct regime by allowing the ACCC to issue competition notices to carriers and carriage service providers without prior consultation, and
  • strengthen consumer safeguard protections.

In other telecommunications news, the Australian Competition Tribunal (Tribunal) has confirmed it may wind back regulated access to Telstra's wholesale voice services in metropolitan and CBD areas where competition has sufficiently developed. The Tribunal has indicated that whether an exemption will apply in a particular area will depend on a number of factors, including the number of Telstra's competitors already using the Unconditional Local Loop Service in that area as well as the market share of the relevant competitor. Telstra will still be required to provide access to the Local Carriage Service, Wholesale Line Rental and PSTN Originating Access services in non-exempt areas.