Telstra separation passes lower house

Draft laws which will pave the way for the rollout of the NBN through the structural separation of Telstra, have passed the lower house of parliament.

The changes will require Telstra to conduct network operations and wholesale functions at arm's length.

Opposition communications spokesman, Malcolm Turnbull, said the opposition backed the structural separation of Telstra in principle but moved a raft of amendments to the proposed laws.

Mr Turnbull's amendments included a push to ensure the NBN Co and Telstra deal was subject to the Competition and Consumer Act under existing competition laws.

As a monopoly prices for broadband would inevitably creep up, Mr Turnbull said.

"The only thing that can keep it honest is competition," he told parliament.

Without competition the digital divide would grow deeper between those on high incomes and those at the other end of the scale, Mr Turnbull said.

Infrastructure Minister, Anthony Albanese, said the legislation was historic and vital as the foundation stone in delivering a faster broadband network.

Mr Albanese said it was "about time" the opposition got with the program on the importance of the NBN.

The minister said the amendments were unnecessary because the draft laws already allow the Australian Competition and Consumer Commission to scrutinise the deal.

Mr Albanese said Mr Turnbull's assertions were "nonsense" and the opposition was running with "straw arguments" in its bid to delay the NBN.

Mr Turnbull said a gun was being held to Telstra's head with provisions in the bill barring it from bidding for next generation wireless spectrum and forcing it to divest its pay television cables or Foxtel interest if it doesn't do it voluntarily.

Independent MP, Rob Oakeshott, supported amendments put up by Mr Turnbull on the issues of procedural fairness and merit review but the government still had the numbers to defeat the move.

Mr Oakeshott urged the government to expedite NBN Co's business plan to make decisions on the issue easier.

All of Mr Turnbull's amendments were opposed.

The Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010 passed the lower house on Tuesday and will now go to the Senate for consideration.

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