I personally don't believe that a clear thinking person should be put off LLU by adverse impact on markets, Cullen fund, Telecom employees, overseas investor flight etc - remember "What's good for GM is good for America, and vice versa"? And in any case, Telecom have shown they're perfectly capable of screwing up all by themselves (AAPT).
However it seems Telecom's prosperity is critical for these vested interests and this is preventing greater regulation.
So why not introduce landline piggybacking regulation as per mobile networks instead? TelstraClear would be incentivised to lay cable to reach the 10% threshold and one or two other players might join in. Competition but not a deluge. Regulation but "not too heavy, not too light".