http://www.theaustralian.news.com.au...51-643,00.html

BRITISH Telecom's new chief executive officer Ian Livingston has hit back at
criticism by Telstra of the functional separation of its retail and
wholesale business, saying the move in Britain had been a win for consumers,
driving broadband penetration, slashing prices and sparking a vibrant market
for high-speed internet service with more than 200 companies.

The possible separation of Telstra's business -- either by way of an
internal split or a more radical cleaving of the group into two or three
separate companies, or the creation of a separate company to house the Rudd
Government's plan to help fund a national network worth up to $25 billion --
has now moved firmly on to the agenda.

BT underwent structural separation in 2005, after striking a deal with the
British regulator.

New Zealand recently followed, while the European Commission and other
regulators around the world are looking at separation as a means to increase
competition, drive down prices and boost innovation. The Rudd Government
will this week begin to consider submissions from the telecoms and media
sectors about the shape that regulation of the $34 billion-a-year sector
should take with the new national network.

Apart from Telstra's, the submissions have unanimously called for some
separation of the former monopoly which still has more than 80 per cent of
the industry's profits and the highest earning margins of any former
incumbent telco monopoly around the world.

In recent weeks, Telstra has raised its concerted attack on attempts to
force any form of stronger separation through its chairman Donald McGauchie,
who has called for the federal Government to take the separation debate off
the table.