Telstra access seekers have voiced their alarm around delays that will see telco reform legislation off the Senate’s agenda until February next year.

With the legislative package in question portending either structural or functional separation of Telstra, the prevailing fear seems to be that the extra time could be used for the telco to cut clandestine deals with the federal government in the interim, away from the scrutiny of regulators and competitors.

The controversial bill includes measures that could force Telstra to divest its HFC network and Foxtel holdings, and bar it from certain spectral frequencies unless the telco voluntarily agrees to separate its wholesale and retail components. It was due for a Senate hearing yesterday but slipped off the agenda, displaced by extended debate around the emissions trading scheme.

“We’re disappointed that the legislation did not have an opportunity to be voted on, as any delay in the bill becoming law disadvantages consumers,” Macquarie Telecom’s national executive for regulatory and government affairs Matt Healy told CommsDay. “Absent the framework on structural reform that the bill would have provided... any ‘deal’ between Telstra and the government that unfolds in the meantime would lack transparency, would lack the ability for review, and would lack analysis by regulators, competitors and other interested parties.”

“As we saw with the past government, when deals are done behind closed doors between Telstra and ministers, we can have no confidence that they will be deals which are in the benefit of competition and consumers.”

“The other concern is that customer service guarantees, universal service obligations and all those consumer safety nets are going to be up for grabs as well – and Telstra is on the record as wanting to water those down, and will have the opportunity again to do that behind closed doors,” added Healy. “Two hours is a long time in politics this past week – so three months could be an eternity! And it is in the darkness, in which these discussions between Telstra and the minister are taking place, that we have real concerns that consumers will be dudded.”

“The Emissions Trading Scheme has proven to be Telstra’s get out of jail free card,” said Optus director for corporate and government affairs Maha Krishnapillai. “We are disappointed that the much needed reform legislation didn’t get passed in this parliamentary sitting and urge the Government to make it a priority when parliament resumes in February.”

“Without the legislation Telstra may cut a deal which will see Australia stuck with the current regulatory regime for another eight years – to the detriment of customers and competition,” he told CommsDay. “If a deal is struck between now and February it is crucial that any changes to the regulatory regime must be reviewed and approved by the independent regulator, the ACCC.”

ANALYST ANGLE: But Nigel Pugh, consulting director at analyst firm Ovum, downplayed the dangers of the delays. “You’ve got to remember that [the legislation]’s just been delayed – it’s still on the table,” he said. “I don’t think it’s going to have a major impact on the industry in the short term... NBN Co. and Telstra are still negotiating, and NBN Co is still developing its business model.”

“If they do a deal, that might take some of the pressure off regulatory reform – but if a deal is done between Telstra and NBN Co., that could be a positive as well. Until you see the deal, it’s difficult to comment on its effects.”