Telstra hands separation plan to ACCC

Telstra has delivered its structural separation plan to the Australian Competition and Consumer Commission (ACCC) for approval, as the telco giant takes the next step to decommission its ageing copper network.

The Structural Separation Undertaking (SSU) and the Migration Plan were submitted to the ACCC late last week, and Telstra said that it expects the ACCC to begin public consultation on the documents soon. Assuming that the competition watchdog approves the documents, and shareholders vote in favour of Telstra's $11 billion deal with the National Broadband Network Company (NBN Co) and the government later this year, the telco will separate its wholesale business from its retail business, and begin progressively moving customers over from its copper access network and hybrid fibre-coaxial network to the NBN.

Telstra has committed to completing structural separation by 1 July 2018, while decommissioning the copper network is expected to take until 2020, when the NBN roll-out is completed.

"The submission of these documents is another important step in finalising Telstra's participation in the roll-out of the National Broadband Network," Telstra CEO David Thodey said in a statement.

"Along with seeking shareholder approval, ACCC acceptance of the SSU and approval of the migration plan are critical condition precedent to the Definitive Agreements signed in June."

The document appears to address some of the concerns of Telstra's competitors. In criticising the draft structural separation instrument documents published by Communications Minister Stephen Conroy in June, Optus head of regulatory affairs Andrew Sheridan told ZDNet Australia that Optus would like to see Telstra publish price lists, produce arm's-length contracts, and provide assurance that Telstra services and faults are dealt with in the same timeframe for wholesale customers and Telstra retail customers. Included in the plan released today is an equivalence and transparency regime that will see Telstra publish a rate card for fixed-line declared services and wholesale DSL services.

However, Optus' concern about the independence of the new adjudicator, which will be funded by Telstra, does not appear to have been addressed in the SSU. The documents still flag the creation of an independent telecommunications adjudicator, which will be charged with resolving complaints between the wholesale arm of Telstra and its customers. Decisions will be binding, and the process will take six weeks without the involvement of the regulator or courts.

As part of the undertaking and the migration plan, Telstra will have internal "ring fencing obligations" that will prevent the retail arm of Telstra from gaining access to confidential information about its wholesale customers. These obligations will also touch the NBN roll-out. NBN Co will be publishing 12 month roll-out plans, and three-year indicative plans for where the NBN intends to head next. Telstra's wholesale arm could be given more detailed information about these plans as it decommissions its network, but the obligations will prevent the telco's wholesale arm from passing it off to its retail unit, thereby preventing any competitive advantage for Telstra over its rivals.

In the draft migration plan, Telstra will be required to disconnect copper lines around 18 months after NBN Co determines an area as being "ready for service", and the telco must publish a schedule of disconnection dates for areas where the NBN is rolling out. Customers who have not disconnected three months prior to the deadline will also receive notifications from Telstra advising them of the pending disconnection.