ACCC accepts Telstra's SSU

After a number of last minute revisions, the Australian Competition and Consumer Commission has accepted Telstra's structural separation undertaking (SSU) and the draft migration plan to move customers from the Telstra copper access network to the National Broadband Network (NBN).

The Australian Competition and Consumer Commission (ACCC) rejected Telstra's first attempt of the document, which sets out how the telco's wholesale business will function in the interim 10-year period as the NBN rolls out across the country and commits Telstra to structurally separate its wholesale and retail arms by 2018. Telstra resubmitted the undertaking in December and, following additional industry feedback, submitted a final document five days ago.

Telstra's competitors had been concerned that there were too many exemptions and limitations that would give the telco enough leeway to show its own retail arm favouritism. They also feared that enforcement measures were likely to be ineffective.

In the last revision, Telstra set out that its wholesale arm would treat its retail arm the same as any other wholesale customer.

According to the ACCC's decision document (PDF), the regulator said the final document is consistent with the legislative requirements for structural separation, particularly around transparency and equivalence measure and compliance measures.

There will be price equivalence through new wholesale access contracts that by default will have charges set out by the ACCC access determinations. The SSU also contains commitments from Telstra for the quality of the supply of regulated services and the security of the wholesale customer information to ensure this does not get passed on to Telstra's retail unit.

There will also be a new procedure for resolving disputes between Telstra wholesale and access seekers, including a new independent telecommunications adjudicator. The SSU also sets out an overarching commitment from Telstra to provide "equivalent outcomes for wholesale customers".

The SSU caused a number of changes to the $11 billion deal between Telstra and NBN Co, although none were substantial enough in order to force Telstra to get shareholder approval again. Chief among the changes were the removal of a ban preventing Telstra from promoting wireless as a substitute for fibre services, and Telstra will continue to supply Foxtel over its hybrid fibre-coaxial network.

ACCC chair Rod Sims said in a statement that Telstra's final revision had made enough improvements to satisfy the regulator's requirements.

"Telstra has made substantial improvements to its interim equivalence and transparency commitments," he said. "Many of these measures were significantly strengthened during the public consultation period, through expanding the scope of their application and the range of consequences in the case of non-compliance."

Telstra CEO David Thodey said the telco would now work with the government and NBN Co to finalise the $11 billion NBN agreement.

"There are a small number of matters left to finalise with the government, including NBN Co shareholder approval and Telstra receiving ministerial waivers from the legislative requirement to divest our HFC network and our share in Foxtel," he said in a statement.

The undertaking comes into force once these waivers have been given, Thodey said.