ACCC reveals it has accepted Telstra’s revised SSU

28 Feb 2012

Australian fixed line incumbent Telstra has finally cleared the last regulatory hurdle to its participation in the National Broadband Network (NBN) project, after the Australian Competition and Consumer Commission (ACCC) accepted its revised structural separation undertaking (SSU). The announcement comes less than a week after Telstra submitted an updated version of the undertaking after regulator had come under increased pressure to reject the previous version, with submissions lodged by a number of Telstra’s rivals claiming that the plan was fundamentally flawed.

‘The ACCC’s acceptance of Telstra’s undertaking marks a significant milestone in the structural reform of the telecommunications sector,’ ACCC chairman Rod Sims said of the development. Making reference to the changes to the undertaking, Mr Sims added: ‘In particular, Telstra has made substantial improvements to its interim equivalence and transparency commitments, which are intended to ensure that wholesale customers gain access to key input services on an equivalent basis to Telstra’s retail business units during the transition to the National Broadband Network.’

According to the ACCC, one key feature of the new regime is that Telstra has undertaken to deliver price equivalence to all its copper-based access services and exchanges through new wholesale contracts that by default will have charges set in line with the regulator’s access determinations. Further, Telstra has also agreed to renegotiate existing wholesale ADSL contracts if requested by a customer, in part as a result of the ACCC’s recent access determination in which it declared wholesale ADSL services. The new interim measures also include specific commitments to ensure the quality of Telstra’s supply of regulated services, and the security of wholesale customer information, with such commitments supported by ring-fencing arrangements and the periodic reporting of key performance indicators and financial accounts. The undertaking also provides for various compliance measures and dispute resolution processes, including an independent telecommunications adjudicator scheme.

Telstra and NBN Co, the company overseeing the construction and management of the NBN, have also addressed a number of issues regarding commercial arrangements raised by the ACCC. One example cited by the regulator is that restrictions on Telstra promoting wireless services as a substitute for fibre services have been removed, with Telstra’s marketing of those services instead being governed by the usual requirements of the Australian Consumer Law. In addition, NBN Co and Telstra have provided an undertaking to the ACCC that amendments to commercial arrangements that would restrict either party from competing will be subject to ACCC oversight.