Progress made in Telstra separation discussions

Negotiations between the Telstra, NBNco and the Government around structural separation and the telco’s potential involvement in the National Broadband Network (NBN) have progressed, the parties claim.

In September, the Federal Government introduced [[artnid:318599|legislation that would force the telco to separate its wholesale and retail arms in a bid to level the playing field in the telecommunications industry.

The bill, which will be debated in Parliament in February 2010, also involved absorbing Telstra’s network assets into the $43 billion NBN. Telstra and the Government now claim to have formalised the Terms of Engagement, which include a preferred model for any agreement concerning transition of Telstra’s copper assets to an fibre-to-the-premise system used for the NBN.

Telstra will trial a copper to fibre upgrade in the Melbourne suburb of Point Cook to assess practical issues associated with fibre deployment in established locations. The telco will then provide NBNco network engineers with the information collected from the trial.

According to a press statement by Broadband Minister, Senator Stephen Conroy, a model for NBNco to utilise Telstra’s backhaul infrastructure and copper assets will result in structural separation. If separation goes ahead, the Government will work closely with the Australian Competition and Consumers Commission (ACCC) to ensure improved competitive outcomes during the transition.

“While the legislation remains an important reform in its own right, the Government has always said that it also provides a framework within which any agreement with Telstra can be independently evaluated by the ACCC,” he said in a statement.

Commercial wholesale discussions are also on the cards but no information is provided at this stage. A final agreement is yet to be reached and all parties involved are remaining tight-lipped about the issue.

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