Internode MD: 'Flawed' Telstra separation puts pressure on gov't over NBN

17.10.2011
The Government and the Australian Competition and Consumers Commission (ACCC) have been put in a difficult spot over the National Broadband Network (NBN) thanks to shortcomings of Telstra's structural separation undertaking (SSU), according to Internode managing director, Simon Hackett.

Hackett outlined his thoughts on the future of the NBN and highlighted several key concerns at the Communications Day Summit in Melbourne.

One of those concerns relates to the SSU submitted by Telstra in August. The SSU was intended by the Government as a tool to structurally or functionally separate Telstra in order to quell the telco's dominance in the industry.

Telstra is required to structurally separate its wholesale and retail arms or have some form of separation forced upon it by the Government as part of the telecommunications bill passed last year. The SSU details how the telco plans to undergo separation. It imposes conditions and is subject to ACCC approval.

A month after the SSU was submitted in August, the ACCC raised concerns over 'inadequacies' of the document, including what the regulator considered to be a lack of commitment from Telstra to offer its wholesale customers the same services - a incumbent issue due to Telstra's vertically integrated nature. The concern was echoed by other telcos, including Optus, iiNet, Internode and Adam Internet.

The ACCC said in a discussion paper that it could not accept the SSU. But the progress of the NBN relies greatly on the approval of the SSU by the regulator. To compound the issue, Telstra is due to hold its Annual General Meeting where shareholders will vote on the $11 billion deal between Telstra and NBN Co - which by necessity takes in the SSU.