Telstra split plan the 'bare minimum': Optus

Telstra split plan the 'bare minimum': Optus

Summary: Telstra has only met the bare minimum requirements set out by Communications Minister Stephen Conroy in its structural separation plan, according to Optus — which doesn't believe that the plan makes sure that Telstra Wholesale will treat its retail arm on an equal basis to its rivals.

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Telstra has only met the bare minimum requirements set out by Communications Minister Stephen Conroy in its structural separation plan, according to Optus — which doesn't believe that the plan makes sure that Telstra Wholesale will treat its retail arm on an equal basis to its rivals.

Telstra's "Structural Separation Undertaking" (PDF) and "Migration Plan" (PDF), delivered to the Australian Competition and Consumer Commission (ACCC) last week and published this morning, detail Telstra's plans to separate its wholesale arm from its retail arm as it begins the long journey to decommission its copper and hybrid fibre-coaxial networks over the next 10 years and move customers onto the NBN.

The separation plan also sets out the environment in which Telstra Wholesale will provide services to telcos for the period until the NBN is completed. However, according to Optus' general manager interconnect and economic regulation, Andrew Sheridan, the undertaking is "largely a repackage of the current arrangements", and will not improve competition.

"These arrangements deliver very little change from what we have in place today," he told ZDNet Australia. "And they're very much a repackage of the existing operational, separational arrangements that were put in place in 2005, with just a few additional tweaks, and those tweaks, we think, are very immaterial".

He said that Telstra just met the "very bare minimum" that was required under a ministerial determination issued a few weeks ago. As part of the undertaking, Telstra has committed to publishing a price list to show that all wholesale customers are paying equal prices to access the services. However, Sheridan said that the pricing list wouldn't include Telstra's retail business.

"Our main concern was that for an equivalence arrangement to be effective, then it needed to guarantee that Telstra Retail was supplied the same services at the same prices as was supplied to Telstra's wholesale customers," he said. "There's no obligation on that in these set of arrangements."

In the document, Telstra outlines that fault reporting and the commissioning of new services will be handled by Telstra Wholesale, the same with Telstra retail as with other wholesale customers; however, Sheridan said that the "spin" around that was that there were a number of exceptions, including one that specifies that for existing services that are regulated by the ACCC, the service level agreements (SLA) already in place will continue to apply.

"The commitment there is basically just to deliver the same SLAs that are in place today and those SLAs have never been meaningful or fit for purpose," he said.

"Much of what they're committing to do, they're already doing today," he said.

Under the plan, dispute resolution between Telstra Wholesale and telcos must first be examined by Telstra itself. If either party is not satisfied with the outcome, then it can go to a newly established adjudicator, which is funded and appointed by Telstra. Sheridan said that this will only stretch out the time it takes to resolve disputes.

"We have an independent adjudicator today — it's the ACCC, and therefore this just brings in another layer of bureaucracy and rather than speeding up the process of disputes, it potentially adds to the further delay in resolving disputes," he said.

The ACCC will spend the next 28 days in public consultation on the plan, and will then issue a discussion paper, calling for further comment. Sheridan said it is critical that the ACCC attempts to make some changes to the undertaking.

"We really do have one last chance to get it right, and the onus is back on the ACCC to look at the interest of consumers and perhaps make some small but important changes to these arrangements to ensure that we do get competition in this 10-year period."

Topics: NBN, Broadband, Telcos, Optus, Telstra

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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5 comments
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  • ...and Optus would do more than the bare minimum?
    DanielB1
    • It's hardly the point to argue whether Optus would do more or less, if they were in Telstra's shoes. It's not about "Telstra" as a personality or individual vs another company.

      Yes, Optus might well do the same; as would iiNet or any other company, if they were the owner of the Customer Access Network.

      It's about fairness that would apply to all, whoever happens to be holding the whip hand - saying that there will be effective separation between the wholesale and retail functions. Telstra submitted the bare minimum because - well, they're not a charity. They are in the business to maximise their own advantage. No different from any other company.

      That's where the role of the ACCC is unique - it ISN'T a player in the market, and has the single-minded focus of making sure that the agreement is fair. You can't expect Telstra or Optus or anyone else to do that on their own; it isn't possible.
      Gwyntaglaw
  • As long as Optus continue to be part of the Gang of Four domestic peering arrangement, they have no basis whatsoever for commenting on Telstra's competitive conduct.
    theevilmuppet
  • Whinging Floptus at it again I see. Maybe they should spend less time worrying about what Telstra are doing and concentrate on fixing their own issues such as their dodgy network!
    Floptus
  • For years Telstra long suffering shareholders have seen Telstra opponents whinge and whine to gain advantage (a squeaking door gets the most oil or whinge and win) but the time is finally here, with the demise of Telstra Wholesale, for Telstra opponents to face the fact that they must now compete with the rejuvenated and awakening Australian giant, Telstra, and compete fiercely and fairly and to the advantage of the Australian consumer.
    sydneyla