Telstra submits separation plan for regulatory approval

1 Aug 2011

Australian fixed line incumbent Telstra has reportedly handed its structural separation plan to the Australian Competition and Consumer Commission (ACCC) for approval, ZDNet Australia reports. Telstra’s Structural Separation Undertaking (SSU) and its Migration Plan, the latter of which details proposals to move the telco’s existing customers to the in-development National Broadband Network (NBN), were understood to have been submitted to the regulator late last week, and a public consultation is expected to begin shortly. Under the proposals – which will require approval from the ACCC as well as a favourable vote from Telstra’s shareholders – the incumbent has committed to completing structural separation by 1 July 2018, in addition to which it has said that its copper network would be decommissioned by 2020, when the NBN is completed.

The submission has also reportedly sought to address concerns raised by some of Telstra’s rivals, following criticism of the draft structural separation instrument documents unveiled by the government last month, which prompted calls for Telstra to publish price lists and provide assurances that faults would be dealt with in the same timeframe for both wholesale customers and Telstra’s own retail subscribers. As a result, the latest plan submitted by the incumbent is understood to include an equivalence and transparency regime that will see Telstra publish a rate card for fixed line declared services and wholesale DSL services. Concerns raised by Optus though – regarding the independence of the new Telstra-funded adjudicator charged with resolving complaints between Telstra’s wholesale arm and its customers – do not appear to have been addressed. It has also been noted that, as part of the undertaking and the migration plan, Telstra will have internal ‘ring fencing obligations’ which will prevent the telco’s retail arm from gaining access to confidential information about its wholesale customers. Further, such obligations will also relate to the rollout of the NBN; with NBN Co, the public-private company set up to oversee the management and construction of the new fibre network, publishing twelve month rollout plans, and three-year indicative plans for where the network will head next; there had been concerns that Telstra’s wholesale arm could be given more detailed information about these plans as it decommissions its network. The obligations set out as part of the latest proposals will reportedly prevent the wholesale arm from passing such information on to the retail unit however, effectively preventing any competitive advantage for Telstra over its rivals.

Under the terms of the draft migration plan meanwhile Telstra will be required to disconnect copper lines around 18 months after NBN Co determines an area as being ‘ready for service’, while the incumbent will also be required to publish a schedule of disconnection dates for areas where the new fibre network is rolling out.

Commenting on the development, Telstra CEO David Thodey noted: ‘The submission of these documents is another important step in finalising Telstra’s participation in the rollout of the National Broadband Network … Along with seeking shareholder approval, ACCC acceptance of the SSU and approval of the migration plan are critical conditions precedent to the Definitive Agreements signed in June.’