Telstra's separation fairy tale

Telstra's latest structural-separation undertaking (SSU) attempts to satisfy the industry and the regulator that dealing with the incumbent will be fair and equitable — but is such a promise too good to be true?

The new submission from Telstra tackles some of the concerns from the first SSU. It more clearly defines what is meant by equivalence, and puts up the Chinese walls by limiting the number of line managers who oversee more than one operating division.

It also says that disputes with retailers can bypass their proposed industry adjudicator, and go straight to the ACCC.

So, will it work? Guests on this week's Twisted Wire suggest that it will, to an extent. But we'll have to get used to ongoing arbitration, and that'll probably always be the case, no matter what the wording in the SSU. Oh dear; no fairy tale ending, then!

Rod Sims, chair of the ACCC, has said that provided the outstanding concerns around wholesale ADSL can be quickly resolved, he is likely to accept the proposal. All seem to agree that making wholesale ADSL a declared service is the price Telstra will have to pay to get the agreement over the line. That way, they can sell their assets and get hold of the pot of gold.

Helping sort out fact from pixie dust are:

• Industry analyst Paul Budde
• Ovum telco analyst and research director David Kennedy
• Principal at Layer 10 Consulting, Paul Brooks.

Tell us what you think. Call the Twisted Wire feedback line — (02) 9304 5198.

Running time: 33 minutes, 8 seconds