Telcos separate over NBN regulation

Managing director Rosemary Sinclair said access to the Fibre-to-the-Node (FttN) network could be sold through a functionally separated structure.

"It's open to bidders, but structural separation is the best. The absolute bottom requirement is functional separation where there is a clear delineation between the wholesale provider and the retail unit," Sinclair said. A group dubbed NBN Australia would ensure the wholesale prices remain competitive, under ATUG's plan.

" There are some opportunities for competing fibre networks to be laid in [metro] areas, but wholesale regulation will be required in regional areas because economics will only allow for one network.

"We don't want to close the opportunity for multiple networks to be built (as in France), but we aren't being stupid about it because it won't happen early."

Sinclair said regulation must be created to buffer possible access price inflation during the transition to an NBN.

Professor Martin Cave, adviser to the European Union on broadband regulation, wrote in Telstra's submission that the functional separation of British Telecom (BT) will not work if applied to Australia's NBN operator.

The split between BT and its wholesale arm Openreach, he argues, is stifling the migration to an NBN access regime because it applies to the Unbundled Local Loop (ULL), which fellow contributors claim is fair in Australia.

Telstra Wholesale group managing director Kate McKenzie said the entire network should be run by a single provider without functional or structural separation.

"If this network is going to be built, the builder needs up-front certainty that its investment will not be undermined or given away by regulatory changes once a decision to invest is made," McKenzie said.

The company's submission stated a Telstra NBN will provide "equivalent" access to competitors based on that provided to its own business units, using "automated processes".

It further argued for the removal of regulations for "legacy networks" and provisions in the tender that require a mix of old and new technologies.

The Regional Telecommunications Independent Review Committee (RTIRC) was unable to discuss their submission to government on NBN regulation.