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Telcos: Telstra SSU still unacceptable

Telcos: Telstra SSU still unacceptable

Despite submitting a new and improved structural separation undertaking, Telstra’s competitors are still not pleased with the changes and have urged the ACCC to reject the document

A number of telcos have claimed Telstra’s revised structural separation undertaking (SSU) is still not up to scratch in their submissions to the Australian Competition and Consumers Commission (ACCC).

The SSU details how the telco will separate its retail and wholesale business, a key component of the National Broadband Network (NBN) rollout.

NBN Co and Telstra’s $11 billion deal hinges on the ACCC approving the new and improved SSU the telco resubmitted late last year after the original document was rejected by the consumer watchdog.

Telstra had strived to make its SSU more appealing, including bringing in an overarching equivalence obligation (OEO) to ensure its wholesale division will treat retail competitors fairly.

Public consultation on the revised SSU closed on Friday.

AAPT said the ACCC shouldn’t be distracted by focusing on the positive outcomes and ignoring the “niggly details” of the new SSU.

“The improvements themselves do not displace and nor can they be relied upon to diminish the fundamental flaws which still remain in the revised SSU,” the telco said in its public submission to the ACCC. It maintained the revised SSU still cannot be accepted since it is still inadequate in reducing Telstra’s inequity in wholesale ADSL pricing even with the OEO in place.

Judging from the submissions, a number of ISPs still saw too many loopholes for Telstra to escape the obligation of providing equitable wholesale ADSL services to its competitors.

Law firm, Herbert Geer, representing Adam Internet, iiNet, Internode and TransACT, was particularly concerned the ACCC considered the Telstra’s revised SSU acceptable.

“The SSU excludes all aspects of functional separation, which contradicts Telstra’s requirement to give a commitment to the equivalence obligation,” Herbert Geer said in its ACCC submission.

It also deemed the equivalence mechanisms introduced by Telstra in the new SSU as inadequate.

That sentiment was echoed in Optus’ ACCC submission.

“Optus submits that the OEO remains ineffective as its scope is unclear and it is questionable how it can be applied to be enforced against Telstra,” the telco said. Ambiguities involved in the drafting of the OEO are “likely to undermine the effectiveness and enforceability of the OEO”, Optus said.

“Optus also notes the SSU does not adequately deal with price related equivalence,” the company said. “… Finally, this submission highlights continuing concerns with non-price and operational aspects of the revised SSU.”

The ACCC is expected to make its decision on the revised SSU next month.


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