Will structural separation ever be enough?

Summary:The race is on for Telstra to come up with a structural separation plan that will keep the ACCC and service providers happy. But will anything short of a full functional split do the job?

The race is on for Telstra to come up with a structural separation plan that will keep the ACCC and service providers happy. But will anything short of a full functional split do the job?

It's been a complex process. Telstra submitted its structural separation undertaking to the ACCC in July. The regulator wasn't convinced that Telstra had done enough to guarantee equivalence of access, price and service to wholesale customers, and called for comment. They held industry forums (which journalists were excluded from), and now everyone awaits Telstra's second draft of their undertaking.

So far, the roadblocks have been pretty significant. Will it do anything to ease the issue of access to Telstra exchanges? Can we be sure that the retail arm won't have advantageous information about wholesale network plans? Are we sure that processes offered to wholesalers will be as efficient as those used by Telstra's retail arm?

It seems that the undertaking relies a lot on the trust of Telstra doing the right thing. Trust is something that has been sadly lacking in the industry for some time. So this week, I ask the question, can we really expect a level playing field if we don't enforce a functional split on Telstra — separate companies, separate management, separate objectives?

To talk about the process so far, and their respective submissions to the ACCC, you'll hear from:

  • Jonathan Gadir, Senior Policy Adviser at Australian Communications Consumer Action Network (ACCAN)
  • Tony Dooley, partner at Herbert Geer
  • David Ohri, solicitor at Herbert Geer.

None of these people advocate the need for a functional split, but, looking at the sticking points, I can't see an alternative. Can you? Will the structural separation of Telstra achieve its aims? Call the Twisted Wire feedback line on (02) 9304 5198.

Running time: 32 minutes, 09 seconds

Topics: Government, Government : AU, Telcos, Telstra

About

Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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