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
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Talkback
Structural separation:
Refers to separating the ownership or control of network elements from the ownership or control of the entity that provides services. This resembles the scenario where an operator outsources ownership of its towers and masts to an independent company. Full structural separation involves outsourcing the entire network to a different company, retaining only the business of providing services to customers.
Functional separation:
Is when the operator establishes operationally separate business entities, but there is no actual change in ownership or ultimate control.
Here is some supporting evidence I am on the right track:
"In this paper, we treat ownership separation as the defining feature of full structural separation"
http://tja.org.au/index.php/tja/article/view/150/162&ei=PuW8TvzuLOutiQeQkZSVBQ&usg=AFQjCNGlKCfx_WaasvF8kQQVPzF0YSALZQ
AND
"BT selling Openreach is one route to what I have always advocated, which is a full structural separation of the business"
http://www.optus.com.au/dafiles/OCA/AboutOptus/MediaCentre/SharedStaticFiles/SharedDocuments/08.06.18%20Dr%20Chris%20DOYLE%20report.pdf
You are rightly confused simply because people today have lost all sense of logic and go for revolution instead of evolution.
Our pathetic Federal Government have spent billions to replicate Telstra's wholesale division and will spend billions more, to the tune of $50 billion in borrowings to provide us, with something we already have but faster.
They appointed a new watchdog who is now on the beat and taking his time to gain fame. Hence the delay in assuming the age old status quo.
http://technologyspectator.com.au/nbn-buzz/nbn-buzz-killing-landline
Besides, your post is completely erroneous.
It will not cost $50billion. It will not cost taxpayers a cent (in the long haul), as you imply.
We do not have this already, we do not have ubiquitous broadband access that has been designed around true broadband and will allow far greater access for a range of applications that have nothing to do with the internet.
At least I am motivated by what I believe is best for Australia and Australians... not my own greedy despicable, more precious than life itself, TLS shares...!
FYI - I'd rather be an ugly but sincere ocker than a greedy and stupid ocker...!
Perhaps it is possible that the ACCC can be happy while the Telstra opponents remain unhappy. It is a fact that Telstra opponents will only be "happy" when they have, by parasitical actions, caused the destruction of fair competition with rules and regulation that are unfair to Telstra.