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15 June 2009

ACCC: Telstra split is needed

15 06 2009 - THE AUSTRALIAN Competition and Consumer Commission (ACCC) has told the Federal Government the structural separation of Telstra is essential to its planned $43 billion national broadband network.

But Telstra in its submission to the Government's review of telecommunications regulation argues that no further separation of its operations is necessary as the new network, which will be wholesale only, would deliver structural separation.

Communications Minister Stephen Conroy yesterday published more than 120 submissions, which he said supported the Government's conviction that regulatory reform was "urgently required" in the sector.

Telstra's submission is conciliatory in tone, restating its commitment to "engaging constructively" with the Government on the broadband project, which it described as a "vital investment for the nation, the telecommunications industry and Telstra".

But the company's submission rejects the need for "costly functional separation", instead suggesting "a number of practical enhancements" to tackle the concerns of other telcos about their access to Telstra's infrastructure.

Specifically, Telstra proposes an independent technical Telecommunications Adjudicator, based on the British model, to make binding decisions to resolve equivalence and service level disputes between access seekers and access providers.

It also suggests an "enhanced price monitoring safety net" by which companies with substantial market power in a particular market that are providing wholesale and retail services would be required to provide notifications to the ACCC, which would have enhanced reporting powers.

It said it would be prepared to accept the results of an expert assessment of competing ACCC and Telstra models for determining the price of accessing its copper network.

In stark contrast, the ACCC argues in its submission that "structural separation is the only framework that will ensure equivalence in access during the transition phase to the NBN and is the only form of separation consistent with the type of wholesale-retail market structure the Government envisages for the NBN environment of the future."

Optus, which has called for the structural separation of Telstra, said Telstra's proposal to replace the ACCC's role with an adjudicator partly funded by the company was akin to a football team replacing the referee at half-time with one of its fans.

Source: business day



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