Telstra's structural separation undertaking

On 27 February 2012 the ACCC accepted Telstra’s structural separation undertaking (SSU).

The SSU commenced on 6 March 2012 and contains a number of obligations designed to promote competition from that date until the NBN fibre network is complete.

The SSU contains four key elements:

• a commitment by Telstra to cease the supply of fixed line carriage services using telecommunications networks over which Telstra is in a position to exercise control from the Designated Day.
• interim equivalence and transparency obligations regarding access to Telstra’s regulated services (no longer required following the Designated Day).
• compliance monitoring processes, to provide the ACCC with transparency over Telstra’s compliance with the SSU
• the migration plan, which sets out steps for Telstra to progressively transfer its fixed-line voice services to the NBN.

Since the SSU commenced, Telstra’s structural separation has occurred progressively, through Telstra ceasing to supply fixed-line voice and broadband services over its copper and HFC networks as the NBN fibre network has rolled out.

Telstra’s obligations under the SSU have changed since the completion of the NBN fibre network on 1 July 2020, known as the ‘Designation Day’, and amendments to the Telecommunications Act 1997 which came into force on 25 August 2020.

Telstra’s reporting obligations under the SSU originally comprised:

• a confidential monthly compliance report on any ‘equivalence issues’ identified by Telstra or reported to Telstra by the ACCC or wholesale customers.
• a confidential annual compliance report, which includes details of equivalence issues identified by Telstra or reported to Telstra by the ACCC or wholesale customers. This report also states the issues that Telstra has identified as breaches of its SSU obligations.
• quarterly public operational equivalence reports, which outline Telstra’s performance against 33 equivalence and transparency metrics. An accompanying confidential report setting out a reasonably detailed explanation of any negative variances of 2% or more.
• quarterly confidential migration plan reports, which outline a number of matters, including the total number of disconnection orders processed that quarter and the proportion of orders completed by the ‘required date’.
• six-monthly public and quarterly confidential Telstra Economic Model (TEM) reports outlining the list of internal wholesale prices and external wholesale prices.
• a report on the common ticket of work tasks under the SSU that identifies common retail/wholesale job tasks to form the basis of comparative metrics for retail and wholesale performance.

See the Telstra Wholesale website for additional Telstra reports and further information.

The Designated Day is the date determined for completion of the NBN fibre network after which Telstra is subject to structural separation obligations set out in its Structural Separation Undertaking (see the legislative instrument determining the Designated Day as 1 July 2020).

After the Designated Day, Telstra continues to have SSU obligations to not connect new copper or HFC services to premises in NBN Co fixed line areas that were disconnected prior to the Designated Day. Telstra is also required to maintain a compliance program to provide assurance that this occurs in practice, and provide quarterly migration plan compliance reports and annual SSU compliance reports to the ACCC.

Under the SSU, a Separation Compliance Program came into effect after the Designated Day. The program addresses Telstra’s commitments made in Part C of the SSU, which require it to ensure systems and processes are in place to:

• prevent services being provided on its legacy network where the NBN is available
• not reconnect premises previously permanently disconnected
• disconnect premises from the legacy network as required by Telstra's Migration Plan
• ensure all relevant Telstra staff are aware of Telstra's obligations under the SSU
• identify and manage any instances of non-compliance.

The ACCC is required to continue to provide annual SSU compliance reports to the Minister for Communications. For more information about the SSU annual compliance reports, please see Telstra's structural separation undertaking.

Under section 577A(2) of the Telecommunications Act 1997, Part D of the SSU is no longer in operation after the Designated Day. Part D dealt with the interim equivalence and transparency measures to ensure equivalence and transparency in the supply of regulated services by Telstra to its wholesale and retail units.

On 3 May 2012, Telstra established the Office of the Independent Telecommunications Adjudicator (the ITA company) to resolve complaints from wholesale customers that arise under Telstra’s Migration Plan or relate to Telstra’s delivery of non-price equivalence in the supply of Regulated Services (ITA disputes).

The provisions of the SSU that describe ITA disputes in the SSU are no longer in operation and there has not been an ITA Adjudicator appointed from the Designated Day.

If disputes arise under the migration plan they can be referred to the ACCC acting as Adjudicator.