ACCC gives Telstra structural separation undertaking the tick

The consumer watchdog is satisfied with the latest iteration of the SSU after rejecting the initial submission last year

The Australian Competition and Consumers Commission (ACCC) has finally given Telstra’s structural separation undertaking (SSU) the seal of approval.

The consumer watchdog has approved the telco’s draft migration plan as well.

Initially submitted in August last year, the SSU outlines how Telstra intends to separate its retail and wholesale businesses, an act which will level out the telco industry playing-field ahead of the National Broadband Network (NBN) being completed.

The document plays a pivotal role in the $11 billion deal between Telstra and NBN Co and works in conjunction with the migration plan to gradually move the telco’s customers onto the NBN.

After rejecting the first SSU, ACCC made Telstra go back to the drawing board and the telco resubmitted a revised version in December 2011. Telstra made some adjustments to the SSU earlier this month.

A number of telcos had express their disapproval of the resubmitted SSU, including AAPT, iiNet, Internode, Adam Internet, TransACT, Optus and TPG.

iiNet has since relaxed its stance on the SSU, partly thanks to the ACCC cracking down on Telstra's wholesale ADSL pricing.

"We were critical of the original version [of the SSU]," iiNet chief regulatory officer, Steve Dalby, told ARN. "When we saw the revisions coupled with the ADSL declarations, I guess we were at a level of comfort.

"It's been accepted by the ACCC so now we have to see how it operates in practice."

The ACCC was satisfied with the range of measures specified in the SSU which deals with how Telstra will supply fixed-line services to wholesale customers during the migration it services onto the NBN.

As part of the NBN Co deal, Telstra will progressively shut down its copper infrastructure as the migration goes on.

“Of particular significance is the commitment Telstra has given to provide equivalence outcomes for wholesale customers as are achievable by Telstra’s retail business,” the ACCC said in a statement. “The inclusion of this commitment provides additional assurance the equivalence and transparency measures will remain appropriate and effective for the duration of the migration period.”

The SSU also gives the ACCC more power to monitor Telstra’s compliance to agreed commitments in the document.

They include restrictions on Telstra to market wireless broadband as a suitable substitute for fibre-based services and the continued supply of Foxtel TV services to customers, which is currently being done on its HFC network.

“Importantly, the SSU and the associated commercial arrangements implement the Government’s preferred migration form of structural separation – which is a factor that strongly supports the acceptance of the undertaking as a result of the specific criteria to which the ACCC is required to have regard,” the ACCC said.

NBN Co welcomed the approval of the SSU.

"This removes the final major obstacle in the way of the large-scale rollout of the NBN," NBN Co CEO, Mike Quigley said in a statement. "We will shortly announce plans to escalate the essential upgrade of the nation's telecommunications infrastructure."

Telstra will now work with the Federal Government and NBN Co to swiftly implement the $11 billion NBN agreement.

“There are a small number of matters left to finalise with the Government, including NBN Co shareholder approval and Telstra receiving ministerial waivers from the legislative requirement to divest our HFC network and our share in Foxtel,” Telstra CEO, David Thodey, said in a statement. “The SSU comes into force once these waivers are received.

Once the SSU comes into play, Telstra has two months to implement specific interim equivalence and transparency measures before the ACCC can come into enforce compliance.

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