Telstra separation guide inadequate: Optus

Optus has slammed the draft Telstra separation instrument documents released by Communications Minister Stephen Conroy earlier this month, saying it will do nothing to change the telco market before the completion of the National Broadband Network (NBN) roll-out.

Optus is today expected to lodge an official response to the five draft instruments that will guide Telstra through the structural separation of its retail and wholesale arms for fixed line services. The telco's head of regulatory affairs Andrew Sheridan told ZDNet Australia that Optus was "extremely disappointed" with the documents that were supposed to guide Telstra in how to supply services to both competitors and Telstra's retail arm over the 10-year period as the NBN is being rolled out.

"Our overall assessment is that it doesn't meet the vision that was set out in the Act last year. It won't facilitate real and meaningful change in this transition period," Sheridan said. "It actually doesn't impose any clear or binding obligation on Telstra to treat its wholesale customers [as it treats] its retail business unit."

"It requires Telstra to put in some new organisational arrangements which are supposed to help facilitate delivering equivalence and transparency to wholesale customers, but, to be honest, they set the lowest possible bar in terms of the sorts of similar arrangements that you see used by regulators around the world," he said.

Sheridan said that under the draft instruments it would be "business as usual" for Telstra in the way it currently operates, and he doubted the proposed telecommunications adjudicator would be impartial during the transition period.

"Maybe I'm being a bit paranoid, but anybody that is set up and funded by Telstra is not likely to be very independent," he said.

According to the executive, in order to achieve true equivalent services between wholesale customers and Telstra retail, Optus would like to see more transparency on the deals made between the wholesale and retail arms of Telstra including published price lists, arms-length contracts, and an assurance that Telstra services and faults are dealt with in the same time frame for wholesale customers and Telstra retail customers.

"Otherwise there's no equivalence. We'll just have this continued situation where Telstra is able to favour its retail businesses and wholesale customers are discriminated against, competition is inhibited and ultimately consumers and businesses are the losers," he said.

The Department of Broadband, Communications and the Digital Economy is accepting submissions on the draft instrument documents until 15 June 2011.