The ACCC says the Australian Government should push ahead with legislation to make Telstra structurally separate, despite calls from the company, shareholders and the Opposition to delay it.
Under the proposed rules, Telstra would need to separate its retail and infrastructure businesses, or else face restrictions on future services.
ACCC chairman Graham Samuel told the ABC's Lateline Business programme the reforms tabled by the Government are long overdue, and are necessary to restore competitiveness to the market.
He said he has heard arguments that if Telstra will create another monopoly if it becomes a part of the National Broadband Network, but it is too early to judge this.
He told Lateline the only way that true competition will be infused into Australian telecommunications is to remove the vertically integrated structure of Telstra.