Telcos separate over NBN regulation

The telecommunications industry remains split over the need for structural separation in the National Broadband Network (NBN), after submissions to government from ISPs and consumer advocacy groups failed to agree on a suitable regulatory framework.

Submissions by Telstra, the Terria consortium and the Australian Telecommunications User Group (ATUG) were divided over the need for the NBN builder to have horizontal structurally separated retail and wholesale arms, a point which has been a bone of contention for the entirety of the tender process.

Telstra has staunchly refused to accept any form of structural separation, favouring share-holder interests, while its rivals argue it is essential to avoid handing the contract winner a network monopoly.

Proponents claim the government's promised $50 NBN access prices will be impossible if retail and wholesale operations are contained in the same company.

Optus government and corporate affairs director Maha Krishnapillai attacked Telstra's refusal to make wholesale NBN access independent in the event it would build the network.

"The structural separation of Telstra and the upgrade of regulatory settings will finally break the multi-year cycle of Telstra litigating and undermining competition by creating fear, uncertainty and delay," Krishnapillai said.

"The focus of this submission is deliberately directed at the reforms that would need to be made to the regulatory framework should Telstra be chosen to construct and operate the NBN. That is, it consciously contemplates the "worst case scenario" for competition.

"Structural separation must be at the core of any regulatory reform."

Such regulation, Optus argues, will reduce involvement from the Australian Competition and Consumer Commission (ACCC) and future-proof proceeding fibre (FttX) deployments.

Structural separation is necessary for the NBN, according to ATUG's submission, although an organisational split of the operator is not essential.