The Australian Competition and Consumer Commission will today issue a discussion paper inviting comment from industry stakeholders and consumers in relation to Telstra’s structural separation undertaking and draft migration plan. The ACCC’s preliminary view is that Telstra’s undertaking can not be accepted in its current form and that important changes are required.
Telstra submitted the undertaking on 29 July and the draft migration plan on 24 August. The objective of the undertaking and plan is to progressively implement structural reform of the telecommunications sector through Telstra ceasing to supply fixed-line voice and broadband services over its copper and HFC networks and supplying those services using the national broadband network.
“While the ACCC will move as quickly as possible towards a resolution, the preliminary view is that the structural separation undertaking that has been provided does not address legislative requirements,” ACCC chairman Rod Sims said.
Telstra’s undertaking, for example, does not yet include a compliance plan for Telstra’s primary commitment to be structurally separated from 2018. This is a matter which is readily correctable by Telstra.
“The ACCC’s main area of concern, however, relates to the adequacy of Telstra’s proposed interim equivalence and transparency measures. The ACCC’s initial view is that there needs to be a clear and enforceable commitment to an ‘equivalence of outcomes' that enables wholesale customers and Telstra’s retail businesses to gain access to key input services of equivalent quality and functionality,” Mr Sims said.
In addition, the ACCC is seeking clarification on the mechanisms that would ensure the proposed equivalence and transparency measures remain fit for purpose for the duration of the interim period.
Further, the ACCC has serious concerns about arrangements between Telstra and NBN CO that include the parties’ ability to vary the arrangements without further scrutiny by the ACCC.
Other initial concerns identified by the ACCC are listed in the Executive Summary of the discussion paper.
Subject to the submissions received the ACCC anticipates that Telstra will need to consider the ACCC’s concerns before submitting a revised structural separation undertaking that is capable of acceptance by the ACCC.
The ACCC does not intend to issue a draft decision prior to finalising its decisions in relation to the undertaking and draft migration plan. Therefore, to assist in its decisions, the ACCC strongly encourages interested parties to make submissions in response to its discussion paper by no later than 5 pm on Tuesday 27 September 2011.