On 5 October 2012, Telstra wrote to the ACCC proposing a variation to the SSU to include a new comparative metric measuring performance in relation to provisioning LSS and BigPond ADSL Layer 2 services. This proposed variation would be effected through amendments to the following provisions in the SSU:
clause 16.1
clause 21.1
section 4 of Schedule 3
section 2 of Schedule 7.
In subsequent correspondence with Telstra the ACCC has expressed the view that the development of a similar comparative metric in respect of ULLS activations would also provide valuable transparency to industry. In this regard, the ACCC considers that the inclusion of a comparative ULLS metric is likely to facilitate the timely identification of system or process issues that may impede Telstra delivering equivalent outcomes in the performance of common provisioning tasks for ULLS and other service activation types.
Interested parties are invited to provide feedback on Telstra’s proposed variations by no later than Friday 14 December 2012. In addition, the ACCC seeks feedback on the likely utility of a similar comparative metric in respect of ULLS activations.
Under clause 18 and schedule 9 of its Structural Separation Undertaking (SSU), Telstra committed to supplying for publication by the ACCC certain financial reports that were drawn from its TEM. The TEM is the main financial reporting and management tool that Telstra uses in its day to day business, and relies on the same financial accounts that Telstra uses for its public reporting.
These reports comprise, for each reportable wholesale and retail product/bundle, the following data:
The fully allocated costs, revenues, demands and economic return – these data are supplied on a half yearly basis; and
The average external wholesale price (revenue yield) and the average internal wholesale price (unit cost)– this report is provided on a quarterly basis.
Where there are any material (greater than 5 percent) differences observed in the external and internal wholesale prices, Telstra is also required to provide a substantial report that explains the reasons for the difference.
The reports are due 60 days following the reporting period to which they relate, and are presented below as they are received from Telstra. All explanations contained in the reports represent Telstra’s views and not those of the ACCC.
Telstra also provided the ACCC with the confidential versions of the TEM Report and the Substantiation Reports for Quarter 1 FY 2013 on 14 December 2012.
The ACCC would welcome any feedback on these reports, including the explanations that have been provided for the material differences in external and internal wholesale prices that have been reported.
Reference prices for the wholesale ADSL Layer 2 service
In Schedule 8 of the SSU, Telstra commits to publishing a rate card of Reference Prices for each of the Reference Services to which the SSU applies. In Clause 1.2(a) of Schedule 8, Telstra commits that the Reference Price for the services expressly identified in that clause will be those specified from time to time by the ACCC in a binding rule of conduct, a final access determination or an interim access determination. Clause 1.2(a) does not expressly identify the wholesale ADSL Layer 2 service.
On 10 August 2012, Telstra wrote to the ACCC confirming that it will comply with the SSU as if the wholesale ADSL Layer 2 service were expressly identified in clause 1.2(a).
Under clause 13.5 of the Structural Separation Undertaking, the service qualification systems that Telstra uses to process requests from wholesale customers are to be of equivalent reliability and response accuracy as those used to process requests from retail business units.
On 27 June 2012 the ACCC sent correspondence to Telstra in relation to systems changes that will be required to enable this obligation to be met as the NBN is built and Telstra’s obligations to cease the sale of new copper based services, and to disconnect or refuse subsequent orders for such services, as part of the migration of copper services.
On 18 July 2012 Telstra responded to the ACCC's correspondence and provided a proposed workplan in relation to the systems changes. This workplan includes a high level description of the issues and a timeline for development and implementation of the systems changes.
On 13 November 2012 Telstra provided an update on the development and implementation of the systems changes. Telstra advised that the systems changes have been delayed by approximately two months and the revised window for wholesale customer cutover and testing is scheduled to occur from the second week in April to the end of April 2013. Telstra also undertook to keep wholesale customers informed of its progress.
Implementation of interim equivalence and transparency measures
Telstra is required to implement specific parts of the Interim Equivalence and Transparency measures (set out in Part D of the SSU) by the dates specified in clause 21, unless otherwise approved by the ACCC.
Telstra may request extensions of time for the implementation of specific measures within the SSU which the ACCC may approve or reject, having regard to the criteria in clause 21.3 of the SSU.
Under clause 16.5 of the SSU, Telstra committed to providing a report which:
identifies common retail/wholesale job tasks that Telstra considers it is reasonably practicable to separately measure and compare its retail and wholesale performance; and
sets out Telstra‘s proposed changes (if any) to existing Equivalence and Transparency Metrics or any new Equivalence and Transparency Measures in respect of those common retail/wholesale job tasks.
