Australian telecommunications firm Telstra commits to structural separation in 2018. The company has submitted its Structural Separation Undertaking (SSU) and migration plan with the Australian Competition and Consumer Commission (ACCC) for acceptance and approval. Telstra recently signed definitive agreements with NBN Co and the government for the sale of its copper network. The approval of the migration plan and acceptance of the SSU are critical conditions precedent to the definitive agreements. The ACCC is expected to launch a public consultation on the SSU and migration plan shortly.
The SSU fulfils two roles. It commits Telstra to structural separation by 1 July 2018. This will occur through the progressive disconnection of fixed voice and broadband services on Telstra’s copper and HFC networks, and subsequent migration of these services onto the NBN. Secondly, it sets out the various measures which Telstra will put in place to provide for transparency and equivalence in the supply of regulated services to its wholesale customers during the transition to the NBN.
The interim Equivalence and Transparency regime includes:
- The publication of a rate card for fixed line access services, which will be made available to all access seekers who are buying new services after the commencement of the SSU;
- Equivalence reporting of input costs based on the Telstra Economic Model (TEM), the primary management accounting system used internally by Telstra for its own business planning purposes, and a commitment to allocate costs equivalently between retail and wholesale business units;
- An expanded set of specific non-price equivalence commitments targeted at known areas of concern which reach beyond the current Operational Separation regime;
- The option for automatic wholesale service level rebates where Telstra fails to meet a committed functionality and availability service level metric for wholesale customer IT systems;
- The creation of an Independent Telecommunications Adjudicator (ITA), based on the United Kingdom model, whose appointment and charter will be approved by the ACCC;
- A fast track complaint resolution process via the ITA, who will have the power to quickly and conclusively resolve equivalence complaints within six weeks without regulator or court involvement;
- New internal ring fencing obligations governing the permitted functions and interactions of staff in ‘retail’, ‘wholesale’ and ‘network services’ business units.
Telstra has also lodged its migration plan with the regulator for approval. The migration plan is a binding instrument which sets out the steps Telstra will take to disconnect voice and broadband services on its copper and HFC networks as part of the migration process. The plan gives wholesale customers control over the timing of the migration of their end users’ services to the NBN. They will be able to lodge orders to cancel services at any time before the required disconnection date so they can be aligned with any related connection orders the wholesale customer has with NBN Co.
