Nick Minchin may succeed in delaying Stephen Conroy’s Telstra break-up Bill. For that matter, Minchin may be right to insist on the Senate taking its time. But he is painting the Coalition into a corner on Telstra and it’s not going to end well.

There are divisions among senior Liberals about whether Minchin’s just-say-no policy on structural separation is appropriate. The Nationals are already halfway off the reservation. Minchin needs a more positive policy than blanket rejection of separation.

The Coalition found itself badly outmanoeuvred before the last election on communications infrastructure, allowing Labor to paint them as Luddites who didn’t get the need for high-speed broadband. Even the government’s failure to implement its election commitment has merely been the occasion for Kevin Rudd and Conroy to again paint themselves as visionaries pursuing a grand $43 billion network dream.

Blanket opposition to addressing the basic problem of Telstra runs the same risk. This Opposition seems to struggle with moving beyond straight-out gainsaying of the government. It is correct, as Malcolm Turnbull has said on several other issues, that they are not the government so it is inappropriate for the media to obsess their lack of policy. But everyone, including Liberals such as Minchin who were ministers in the Howard government, knows that there is a fundamental policy problem in Telstra’s control of network infrastructure and they weren’t able to resolve it through regulation when they were in charge.

Minchin was also the finance minister who oversaw the final, full privatisation of Telstra. Perhaps he remains wedded to the model he shepherded into private ownership. The vigour with which he has pursued the issue suggests that might be the case. That vigour has included a remarkable series of attacks on Graeme Samuel, who has strongly supported structural separation as a remedy for the Telstra problem. “Mr Samuel quite frankly has overstepped his role and responsibility by publicly promoting the government’s NBN policy and also its plans to force the structural separation of Telstra,” Minchin said last week, suggesting he was “reducing public confidence in the ACCC as an impartial competition regulator”. That continued this week at Estimates when Minchin repeated that Samuel overstepped the line on structural separation and was a spruiker for the Labor Party. In Minchin’s view, Samuel and the ACCC simply want an easier life.

How times have changed from seven years ago when Peter Costello’s appointment of the Melbourne Establishment figure and Liberal blueblood to the ACCC infuriated Labor.

Samuel isn’t the only conservative figure offside with Minchin. The Nationals have long despised Telstra with a passion. Pleading for the rights of Telstra shareholders will get no interest in the bush. Barnaby Joyce — who really must be treated as the de facto Nationals leader given Warren Truss’ ongoing reticence — has more or less declared he’s in favour of separation until convinced otherwise.

Joyce’s position is the exact problem with Minchin’s policy, and some other senior Liberals know it. They know the Opposition needs to propose a positive strategy for dealing with Telstra short of full separation. The only real option is a draconian access regime imposed on the company that dictates exactly how it will grant access to competitors and how much that access will cost. Even that would be litigated all the way to the High Court by Telstra. And it wouldn’t address the transition from the copper network to fibre that the NBN will drive.

The other problem with the Coalition’s position is that, unlike on other issues, the government isn’t hostage to the Senate. Stephen Conroy can plough ahead with his plan to prevent Telstra from bidding for any more wireless spectrum (using Howard-era spectrum-licensing laws) regardless of what the Senate says about his Bill, until Telstra jumps through whatever hoops he decides to hold out for it. Not merely will the Coalition sideline itself from the debate by simply rejecting the government’s Bill, but the debate itself will be moot.

However, there’s no immediate resolution to the problem. Malcolm Turnbull is in no position to impose a policy change on a figure such as  Minchin — not with more crucial issues such as the ETS still in play. Turnbull is too weak currently to tussle with senior figures, and that doesn’t look like changing any time soon.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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