Telstra lodges separation plan with ACCC

37

The nation’s largest telco Telstra has filed two key documents with the national competition regulator which will pave the way for the final conclusive step in its decades-long journey from Australia’s telecommunications monopolist to an equal player in the telco landscape.

The first document, the Structural Separation Undertaking (SSU), commits Telstra to full structural separation of its wholesale and retail business units by July 2018. In practice, this separation will take place through the progressive disconnection of fixed voice and broadband services on Telstra’s copper and HFC networks and migration of those services onto the National Broadband Network fibre network as it is rolled out.

In addition, the SSU sets out the measures which Telstra will put in place to provide transparency in the supply of services to its wholesale customers during the NBN transition period over the next decade, as well as providing equivalence in the delivery of services — for example, allocating the same terms to rival ISPs such as Optus, iiNet, Internode and TPG as it does its own retail division, which typically operates under the ‘BigPond’ brand.

The Migration Plan, in turn, sets out the process which Telstra will follow when disconnecting customers from its copper network during the transition to the NBN (but not the process of connecting customers to the NBN, which Telstra says is a matter for NBN Co and each individual ISP).

Importantly, the migration plan prohibits Telstra from supplying a new copper-based telecommunications service to a premise where it can be shown that that premise is capable of connecting to the NBN (except for certain services in the early period of the NBN rollout).

In a statement, Telstra chief executive David Thodey backed the proposals which his company today filed with the Australian Competition and Consumer Commission, which is expected to shortly kick off a public consultation on them.

“We believe the interim equivalence and transparency commitments, which are binding and court enforceable, offer substantial and practical improvements in areas of known industry and regulator concern. These commitments will provide faster resolution of perceived issues and will reduce unnecessary administrative costs for all parties,” Thodey said.

“Importantly, the SSU delivers robust, effective and appropriate equivalence and transparency during the migration period in a way that avoids the complexity, cost and industry disruption that would be caused by functional separation.”

The details
A full copy of both documents has been requested from Telstra. According to a statement summarising the pair, Telstra’s SSU includes a number of stipulations which will change the way the rest of the telecommunications industry deals with the company in the interim period while the NBN is being implemented. For example, it calls for:

  • The publication of a Telstra rate card for fixed line access services
  • Equivalence reporting of input costs based on Telstra’s internal economic model and a commitment to allocating costs equivalently between the company’s retail and wholesale business units
  • An expanded set of non-price equivalence commitments targeted at “known areas of concern”
  • An option for automatic wholesale service level rebates where Telstra fails to meet certain service levels when dealing with its wholesale customers
  • The creation of an Independent Telecommunications Adjudicator (ITA), which will mediate disputes between industry players, based on a similar model in the UK. This new player will have the power to resolve disputes within six weeks without the involvement of the ACCC or the courts
  • New internal divisions between Telstra staff in its different wholesale, retail and network services business units.

The migration plan likewise contains a number of different aspects, focusing on the timing of services to be disconnected and how customers are notified, for example. Telstra noted in a summary of its Migration Plan that a number of processes — such as how it mass-disconnects services in regions which have not voluntarily migrated to the NBN already — have not yet been developed.

Overall, the separation of Telstra will represent a process which many in the telecommunications industry have been calling for for years. Various senior Labor figures — as well as much of the industry, including number two player Optus — have openly stated over the past few years that they believe the then-Howard Government got deregulation wrong when the market was opened up to full competition in 1997; with some believing Telstra should have been separated at that point.

Image credit: Paul Bodea, royalty free

37 COMMENTS

    • That’s what it says, glad you can read.

      Too bad you aren’t keeping up with half the reason the NBN exists; to end Telstras tyranny.

      • @decromin

        *Too bad you aren’t keeping up with half the reason the NBN exists*

        (Labor’s) NBN exists because stupid politicians exist.

        stupid politicians exist because stupid voters exist.

        stupid voters exist because the law gave stupid people the right to vote.

        *to end Telstras tyranny.*

        there we go again… “telstra tyranny”… bandying around silly epithets with no basis in reality whatsoever and ignoring the future “NBNco tyranny”.

        • So Tosh, read Wired Brown Land yet?

          Still no?

          Then you still don’t know what tyranny is.

          And just remember, it’s written by who is now a LIBERAL senator (previously Optus exec and aide to Comms minister), so you can’t even call the Labor political slant into question.

          Less posting, more self education please.

          • *read Wired Brown Land yet?*

            LOL.

            “wired brown land”

            you remind me of those crazed, tunnel-visioned, fanatical Southern Baptist preachers clinging onto a SINGLE BOOK and thinking that everything contained within is TRUTH and totally dispossessed of any capacity for critical or rational thinking.

            *Then you still don’t know what tyranny is.*

            i know how businesses and markets work. you don’t – so you rely on all these emotive garbage like “telstra tyranny”, etc

            *And just remember, it’s written by who is now a LIBERAL senator (previously Optus exec and aide to Comms minister), so you can’t even call the Labor political slant into question.*

            generally don’t give a shite about politics or politicians.

            *Less posting, more self education please.*

            go whim a mod.

          • “you remind me of those crazed, tunnel-visioned, fanatical Southern Baptist preachers clinging onto a SINGLE BOOK and thinking that everything contained within is TRUTH and totally dispossessed of any capacity for critical or rational thinking.”

            If you could point me at a more authoritive guide on Australian telecommunications for the last 15 years, I’m all ears. Trust me, you can’t, because I’ve looked. It summarises it all quite nicely, with references to external material. Somehow I don’t think I’m the one with tunnel vision.

            “i know how businesses and markets work. you don’t – so you rely on all these emotive garbage like “telstra tyranny”, etc”

            Hey it wasn’t my word, and you even quoted it as well, lol.

            “generally don’t give a shite about politics or politicians.”

            Me either, but if you willfully choose to remain ignorant of the very people that govern the market through legislation, then you truly have your head wrapped in a magical capitalistic utopian pillow. I will at least give their decisions some weight by acknowledging their authority.

            “go whim a mod.’

            What for? I don’t see how that will help you learn.

          • everything is ultimately driven by simple “economics” (or whatever you want to call it).

            Telstra refused to sell their infrastructure assets to NBNco (and get MORE $$$) because they know Labor’s NBN is an impending train wreck. they just have to bide their time, watch the billions of taxpayer dollars squandered down a hole under the stewardship of NBNco crony idiots until a future Govt begs them to take back their network monopoly at 20c on the dollar.

            if Telstra was really planning for a future as a pure retailer with zero network business, they wouldn’t be hanging onto their extensive infrastructure assets along with burdensome maintenance obligations. they’d be liquidating them entirely, selling them outright to NBNco for MORE CASH UPFRONT to invest in other growing businesses and not looking back. [but they aren’t doing that, are they?]

            man-made laws can be changed any time but you can’t “outlaw” business fundamentals. god knows, almost 2 billion ppl in USSR/China tried and FAILED.

          • “everything is ultimately driven by simple “economics” (or whatever you want to call it).”

            Actually, it’s not. Otherwise government’s wouldn’t exist and we’d have pure capitalist corporations governing countries.

            “Telstra refused to sell their infrastructure assets to NBNco (and get MORE $$$) because they know Labor’s NBN is an impending train wreck.”

            Really? Did Thodey tell you that in one of your “secret” meetings, lol.

            “they just have to bide their time, watch the billions of taxpayer dollars squandered down a hole under the stewardship of NBNco crony idiots until a future Govt begs them to take back their network monopoly at 20c on the dollar.”

            Telstra can always be counted on to look after Telstra.

            “if Telstra was really planning for a future as a pure retailer with zero network business”

            And where did I suggest that? As usual, you’re imagining points I never made.

            “man-made laws can be changed any time but you can’t “outlaw” business fundamentals. god knows, almost 2 billion ppl in USSR/China tried and FAILED.”

            Lol, yet your “business fundamentals” are man made as well. You really don’t appear to understand government and how it sits outside of capitalism Tosh.Not everything in business takes a dollar and makes it two. Not every business is meant to be self sustaining. The point of business is not business itself, unless you count failed business strategies that brought us the GFC. Unchained (well, a long chain) capatilism is a perfect example that business or profit for it’s own sake is not self sustaining.

          • *Actually, it’s not. Otherwise government’s wouldn’t exist and we’d have pure capitalist corporations governing countries.*

            see, once more, the ignorant NBN proponent fails to understand a simple fact: NBNco is not a “public infrastructure project” but an “infrastructure investment vehicle” that has to be financially viable to avoid going bankrupt.

            *Really? Did Thodey tell you that in one of your “secret” meetings, lol.*

            see you 2013/14, when the future Govt hands Telstra back its network monopoly and gives it billions of dollars in subsidies to build FTTN.

            *Telstra can always be counted on to look after Telstra.*

            you betcha Telstra will look after the interests of its millions of pensioner shareholders (schoolteachers, nurses, firefighters, small business owners) with more competence than the Labor Govt looking after the interests of taxpayers.

            *Lol, yet your “business fundamentals” are man made as well.*

            “economic laws” are not “man-made”. if they were “artificial” in any sense, someone would have found a way for communism to work, or someone would have invented a “virtual wealth generator”.

            *You really don’t appear to understand government and how it sits outside of capitalism Tosh.*

            governments undermine capitalism.

            *Not everything in business takes a dollar and makes it two. Not every business is meant to be self sustaining.*

            businesses can’t lose money forever…. LOL

            *The point of business is not business itself, unless you count failed business strategies that brought us the GFC.*

            (case in point of govenment undermining capitalism.)

            repeated and unnecessary govt intervention in bailing out failed/failing businesses brought us the GFC. in the same way NBNco will be propped up by taxpayer largesse and accounting fraud (until 2013 that is).

          • “see, once more, the ignorant NBN proponent fails to understand a simple fact: NBNco is not a “public infrastructure project” but an “infrastructure investment vehicle” that has to be financially viable to avoid going bankrupt.”

            And once more, the ignorant capatilist purist fails to understand that his perfect “money is the only yardstick” world isn’t reality.

            “see you 2013/14, when the future Govt hands Telstra back its network monopoly and gives it billions of dollars in subsidies to build FTTN.”

            So, still no winning Lotto numbers?

            “you betcha Telstra will look after the interests of its millions of pensioner shareholders (schoolteachers, nurses, firefighters, small business owners) with more competence than the Labor Govt looking after the interests of taxpayers.”

            And what interests would that be? Getting a platform that’s the best value for money, while being scalable enough to last decades instead of a single solution (FTTN) that barely sees us into middle future, while charging top dollar to the detriment of all Australians, widening the digital divide to those which suits Telstra’s bottom line the best? Telstra looks after shareholders Tosh, the government looks after Australians. I trust you know the difference.

            “economic laws” are not “man-made”. if they were “artificial” in any sense, someone would have found a way for communism to work, or someone would have invented a “virtual wealth generator”.

            Someone tried, it was called the junk bond era in the 80’s, the tech crash in the 90’s/00’s, and the GFC recently. Not a perfect system either.

            governments undermine capitalism.

            Capatilism purity is a utopia that does not exist, just like pure communism.

            businesses can’t lose money forever…. LOL

            lol, you missed the point. Again. Some businesses aren’t meant to make money. Look at print media these days. It’s common knowledge the Australian doesn’t make money, so why keep it running? You may want to have a little talk with Rupert about capitalism, lol.

            “(case in point of govenment undermining capitalism.)”

            And wrong again. It was government relaxing regulation.

            “repeated and unnecessary govt intervention in bailing out failed/failing businesses brought us the GFC. in the same way NBNco will be propped up by taxpayer largesse and accounting fraud (until 2013 that is).”

            Pure unadulterated garbage. Par for the course.

          • *And once more, the ignorant capatilist purist fails to understand that his perfect “money is the only yardstick” world isn’t reality.*

            maximising taxpayer-funded govt waste isn’t a desirable yardstick either.

            *And what interests would that be?*

            not wasting precious capital, be it private shareholders’ or taxpayers’.

            *Getting a platform that’s the best value for money, while being scalable enough to last decades instead of a single solution (FTTN) that barely sees us into middle future*

            FTTN can be upgraded to FTTP, you ignorant ****. that’s what many countries around the world are doing. stop reading those rubbish “nbnmyth.org”, “nbnexplained.org” (FUD) websites.

            *while charging top dollar to the detriment of all Australians*

            ever read the NBNco corporate plan? is your grip on reality so tenuous?

            *widening the digital divide*

            ever read the NBNco corporate plan? is your grip on reality so tenuous?

            *Telstra looks after shareholders Tosh, the government looks after Australians. I trust you know the difference.*

            Telstra is an intelligent manager of scarce capital; politicians and bureaucrats are only good at pork-barrelling and squandering taxpayer largesse. i KNOW you don’t know the difference.

            *Someone tried, it was called the junk bond era in the 80′s, the tech crash in the 90′s/00′s, and the GFC recently. Not a perfect system either.*

            what would be better than simply namedropping events would be to actually understand the causes of those events, something that obviously eludes your understanding because they’re not “referenced” in “Wired Brown Land”.

            *Capatilism purity is a utopia that does not exist, just like pure communism.*

            which is why we had the squandering waste of pink batts, school halls and now $50bln NBN white elephant political pet project.

            *lol, you missed the point. Again. Some businesses aren’t meant to make money. Look at print media these days. It’s common knowledge the Australian doesn’t make money, so why keep it running? You may want to have a little talk with Rupert about capitalism, lol.*

            there’s a difference between LOW profitability and NO profitability. oh btw, does “The Australian” have $50bln of debt to service or is it reliant on taxpayer subsidies?

            *Pure unadulterated garbage. Par for the course.*

            is that an excerpt of a critical review from the back of “Wired Brown Land”…… LOL

            (oh, my stomach muscles are so sore)

          • “maximising taxpayer-funded govt waste isn’t a desirable yardstick either.”

            No, but maximising taxpayer funded government investment is.

            “not wasting precious capital, be it private shareholders’ or taxpayers’.”

            At the expense of preserving the existing tilted market?

            “FTTN can be upgraded to FTTP, you ignorant ****. that’s what many countries around the world are doing. stop reading those rubbish “nbnmyth.org”, “nbnexplained.org” (FUD) websites.”

            I don’t think that I’m the one that’s ignorant. You are aware that a FTTN upgrade to FTTH means replacing all the roadside cabinets again don’t you. And you were referring to government waste, lol.

            “ever read the NBNco corporate plan? is your grip on reality so tenuous?”

            Yes I have, a couple of times. Is your grip on reality so tenuous?

            ever read the NBNco corporate plan? is your grip on reality so tenuous?

            Yes I have, a couple of times. Is your grip on reality so tenuous?

            Telstra is an intelligent manager of scarce capital; politicians and bureaucrats are only good at pork-barrelling and squandering taxpayer largesse. i KNOW you don’t know the difference.

            You don’t know what I know, because you’re not interested in finding out. I

            “what would be better than simply namedropping events would be to actually understand the causes of those events”

            Oh the irony.

            “something that obviously eludes your understanding because they’re not “referenced” in “Wired Brown Land”

            I read a lot more than Wired Brown Land. Pity you don’t even get that far.

            “which is why we had the squandering waste of pink batts, school halls and now $50bln NBN white elephant political pet project.”

            Ahahahahahahahah, straw men abound.

            “there’s a difference between LOW profitability and NO profitability. oh btw, does “The Australian” have $50bln of debt to service or is it reliant on taxpayer subsidies?”

            I’m sorry, but are you comparing infrastructure capital to a newspaper operating expediture?

            is that an excerpt of a critical review from the back of “Wired Brown Land”…… LOL

            No, that’s my critical assessment of your rhetoric.

            (oh, my stomach muscles are so sore)

            You should eat some more fibre to help push out the BS then.

          • *I don’t think that I’m the one that’s ignorant.*

            see below.

            *You are aware that a FTTN upgrade to FTTH means replacing all the roadside cabinets again don’t you.*

            that 100% false assertion says it all. your ignorance of basic facts, deliberate or not, is stupifying.

          • “that 100% false assertion says it all. your ignorance of basic facts, deliberate or not, is stupifying.”

            Waiting on your proof, lol. Go on.

            Your deliberate choice at remaining ignorant, is breathtaking.

          • Tosh you don’t even understand the basics of FTTN or FTTH technology. The FTTN cabinets don’t have enough cores for fiber to every household. You have to replace the cabinets and draw brand new fiber all the way from the POI to the households. You basically are forced to rebuild the entire network from the ground up. Seriously your replies to Murdoch sound like you’re drunk.

          • @Merlin

            *The FTTN cabinets don’t have enough cores for fiber to every household. You have to replace the cabinets and draw brand new fiber all the way from the POI to the households.*

            COMPLETE RUBBISH. STOP SPREADING ANTI-FTTN FUD.

          • >COMPLETE RUBBISH. STOP SPREADING ANTI-FTTN FUD.

            Wow really Tosh? Anti-FTTN FUD? I’m cracking up over here. Seriously what are you smoking? How do people like you even grow up and function in society without completely isolating themselves from everyone?

          • Sadly Murdoch it’s a forlorn exercise, you trying to explain rational social conscience concepts to radical conservative dries!

            As long as the boardroom chaps and shareholders are ok… **** the rest, is their motto!

          • “Sadly Murdoch it’s a forlorn exercise, you trying to explain rational social conscience concepts to radical conservative dries!”

            It is. Stil, garbage does need to be identified for those that may get suckered in by it. Tosh’s crusade hasn’t worked elsewhere, not really working out well for him here either.

          • @Murdoch

            *Stil, garbage does need to be identified*

            you’re knee-deep in it.

            *for those that may get suckered in by it.*

            oh, you mean the brainless idiots who can’t think for themselves, but instead uncritically accept “Wired Brown Land” as gospel?

            *Tosh’s crusade hasn’t worked elsewhere, not really working out well for him here either.*

            it must be working then ;)

          • @Tosh*Stil, garbage does need to be identified*

            “you’re knee-deep in it.”

            I know. It’s yours.

            “oh, you mean the brainless idiots who can’t think for themselves, but instead uncritically accept “Wired Brown Land” as gospel?”

            Have you read it yet? No. I don’t see a suggestion of an alternative from you either. So just some more mindless rhetoric.

            it must be working then ;)

            ROFL. Two words describe your outlook Tosh, Dunning Kruger.

  1. Boom, headshot.

    Let competition begin! The evil empire will fall, a new competitve Telstra rises.

    • *Boom, headshot.*

      LOL

      you think “structural separation” is an “overnight” process?

      all these regulatory bullshit documents don’t mean crap in the real world until the fibre is actually rolled-out across the entire copper footprint and customers migrated over. so, we’re talking about a DECADE long process. keep that handgun of yours warm.

      in reality, by 2013/14, the Liberals will be in power and Labor’s $50bln NBN WASTE pet project will be ripped to shreds without so much as a sigh from the electorate. the new Minister presiding over DBCDE will find it too expensive and cumbersome to have to pay Telstra BILLIONS MORE just to touch the copper and build FTTN and then re-privatise NBNco.

      so, NBNco’s regional white elephant fibre network (along with its 50 subscribers) will be sold to Telstra Corp for 20c on the dollar and Telstra will build FTTN with its own money in the capital cities.

      *Let competition begin!*

      NBNco + Labor’s NBN = DEATH TO COMPETITION

      • “you think “structural separation” is an “overnight” process?”

        No, where did I say that?

        “all these regulatory bullshit documents don’t mean crap in the real world until the fibre is actually rolled-out across the entire copper footprint.”

        Actually, yes they do. Kind of like legislation is just documents as well. But they have no power do they? And Telstra seperation isn’t directly related to the NBN. It’s related to the telecommunications market in Australia. The NBN could be cancelled, yet the seperation may continue. Read the legislation, it has nothing to do with the NBN.

        “in reality, by 2013/14, the Liberals will be in power and Labor’s $50bln NBN WASTE pet project will be ripped to shreds without so much as a sigh from the electorate”

        Have you got the winning Lotto numbers for next week? Didn’t think so. That’s just your prediction then.

        “so, NBNco’s regional white elephant fibre network (along with its 50 subscribers) will be sold to Telstra Corp for 20c on the dollar and Telstra will build FTTN with its own money in the capital cities.”

        Still waiting on the winning Lotto numbers.

        “NBNco + Labor’s NBN = DEATH TO COMPETITION”

        So no, you haven’t read Wired Brown Land yet. What a pity.

        • new govt, new parliament, new legislation… NEW REALITY.

          (even the Constitution can be changed.)

          • “new govt, new parliament, new legislation… NEW REALITY.”

            Winning lotto numbers? Didn’t think so.

          • “enjoy the $50bln taxpayer-funded gravy train while it lasts”

            Nothing last forever, I fully intend to, whether it’s for 3 years or 30 years. I would suggest you do the same, but you won’t. Your pride won’t let you.

          • *I would suggest you do the same, but you won’t.*

            enjoy the taxpayer-funded gravy train? why would i?

            i’ve no vested interest in this $50bln NBNco taxpayer scam (e.g. i don’t work for a company that depends on government contracts, neither am i a “VOIP solutions specialist”)

            no doubt, lots of vested interest at play, plus throw in the odd techgeek who gets instant orgasm just fantasing about a NBNco NTU box sitting next to their PC.

            *Your pride won’t let you.*

            pride? on an internet forum? lol…..

          • Well it’s a lot easier to describe the anti-NBN vested interest… Tosh. Just two words…

            Political puppet… (reduce it to PP if you wish)!

            At least most who support the NBN have a justifiable reason for doing so, rather than just baa…!

          • “enjoy the taxpayer-funded gravy train? why would i?”

            Because it guarantees a minimum standard of connectivity for all Australians, now and for the forseeable future. Which includes you.

            i’ve no vested interest in this $50bln NBNco taxpayer scam (e.g. i don’t work for a company that depends on government contracts, neither am i a “VOIP solutions specialist”)

            Me either, I don’t work for a company that depends on government contracts, and I’m not a VOIP solution’s specialist either. Your point being?

            no doubt, lots of vested interest at play, plus throw in the odd techgeek who gets instant orgasm just fantasing about a NBNco NTU box sitting next to their PC.

            Lots of vested interest at play in the negative as well, as demonstrated quite aptly in another of Renai’s posts.

            pride? on an internet forum? lol…..

            Yep, your pride.

  2. Telstra, split thats good,
    but I not smile or laugh until I see what comes of it, and what happens to the competition.
    I think that more telcos will change or merge in the future.

  3. This is why the competitors like interode will not like the nbn, telstra can be on equal footing without internode and other competitors go the accc

    • This is why the competitors like internode will not like the nbn, telstra can be on equal footing without internode and other competitors go the accc

  4. The structural problem with Telstra was created by Kim Beazley when it was corporatised in the early 90’s. The separation between the network division and the retail/wholesale divisions should have been done then.

    I don’t believe Howard could have structurally separated Telstra and sold it in a single term. With the GST and privatisation of Telstra on the agenda I don’t think he’d have got a second term. The GST on its own almost did for him.

  5. By July 2018? that’s has to be a joke, Telstra separation by then will achieve what exactly when the majority of wholesale fixed line BB will be from one company, the new monopolist on the block the NBN Co?

    You expect ISP’s will still be complaining about Telstra, zoned ADSL, LSS and ULL wholesale pricing in 2018?

    The separation of Telstra should have been at least 10 years ago to have achieved anything worthwhile, the present timetable to 2018 with two elections in between is just a political time wasting stunt and will achieve 2/5 of sweet FA.

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