Regulatory review submissions published; ACCC calls for structural separation

15 Jun 2009

In its submission to the government’s review of telecommunication regulations, the Australian Competition and Consumer Commission (ACCC) has said it views the structural separation of incumbent Telstra as essential to the development of the National Broadband Network (NBN). According to The Age, Telstra, however, has argued that no action is necessary, arguing instead that, as the NBN will operate on a wholesale-only basis, it would deliver an adequate level of structural separation. Additionally, Telstra’s submission to the review called for the creation of a new, independent technical body, which it claims could tackle the concerns of other operators with regard to access to Telstra’s infrastructure. It also proposed the introduction of an ‘enhanced price monitoring safety net’, which it says would require those operators deemed to have significant market power to submit pricing notifications to the ACCC. Rival operators have been quick to criticise Telstra’s proposals though, with Optus’ director of government and corporate affairs, Maha Krishnapillai, stating: ‘Instead of providing a constructive response, Telstra has proposed removing the independent regulator, the ACCC, and replacing it with a Telstra funded ‘adjudicator’. That is like a football team replacing the referee at halftime with one of its fans.’

In separate but related news, Optus is reportedly in talks with the government which could see the operator sell its cable infrastructure to the NBN in return for equity in the venture. The Australian is reporting that the move could subsequently see Optus’ parent company, Singapore-based SingTel, spin off the remainder of Optus and relist it on the Australian exchange. If such action was taken it is expected that SingTel would retain an approximate 25%-30% stake in Optus.