Australian govt forces Telstra to separate

bealtine

Tuesday 15 September 2009 | 02:39 AM CET

The Australian government plans to split Telstra into a wholesale and retail unit. The communications minister Stephen Conroy announced fundamental reforms to existing telecommunications regulations. The reforms seek to address Telstra's high level of integration, streamline and simplify the competition regime, and to remove regulatory red-tape. The government seeks to structurally separate Telstra on a voluntary and cooperative basis but will impose a strong functional separation framework on the carrier if it chooses not to cooperate.

The legislation will allow Telstra to voluntarily submit an enforceable undertaking to the Australian Competition and Consumer Commission (ACCC) to structurally separate. If Telstra chooses not to structurally separate, the legislation provides for the government to impose a strong functional separation framework on Telstra.The legislation further prevents Telstra from acquiring additional spectrum for advanced wireless broadband while it: remains vertically integrated; owns a hybrid fibre coaxial cable network; and maintains its interest in Foxtel. The second and third requirements can be lifted if Telstra submits an undertaking to structurally separate.

The new legislation will also streamline parts of the Trade Practices Act 1974 to give the ACCC more power to regulate the communications industry. The legislation will also allow the ACCC to address breaches of competition law and conduct damaging to the market and the ACCC will no longer have to consult with a party before issuing a competition notice; a process previously prone to delay and obstruction.

The reforms also address the Universal Service Obligation (USO). The communications minister will be able to specify the standards, terms and conditions of services, connection and repair periods, and reliability requirements of the standard telephone service. Telstra will be required to meet new minimum performance benchmarks. Failure by Telstra to meet the requirements will expose Telstra to a civil penalty of up to AUD 10 million.

Telstra responded the regulatory reform package with disappointment. However, CEO David Thodey said the company remains committed to working with the government to find a solution that is in the best interests of the industry, the nation, Telstra and shareholders. “It is Telstra's view that many aspects of this package are unnecessary and need never be implemented if a mutually acceptable outcome can be reached on the National Broadband Network. We are willing to discuss options around separation,” Thodey said. Telstra will carefully examine the package over the coming days.

bk

What should have been done to Eircom before it was privatised years ago.

In many ways things are worse in Australia then they are here. The difference is that the Australian government actually recognise the problems and have a well thought out plan on how to fix it and are aggressively implementing that plan.

No sign of any such leadership from our lot.

bealtine

bk wrote: »

What should have been done to Eircom before it was privatised years ago.

In many ways things are worse in Australia then they are here. The difference is that the Australian government actually recognise the problems and have a well thought out plan on how to fix it and are aggressively implementing that plan.

No sign of any such leadership from our lot.

The key words are "plan" and "aggressively implementing", two words that are obviously missing when it comes to Ireland. Our Minister for Communications, is spending his time of financial matters (NAMA) rather than looking after his own patch. While he plays at being the minister for Finance communications is rotting away. This just shows the disarray that the government is in. Also demonstrates the reasons why this government is so ineffective.

Sponge Bob

Unlike the morons in charge of policy in Ireland the Australian Government knows what it wants and will legislate for it . Their regulator is not getting in the way either , there shall be a "New Regulatory Regime"

http://www.smh.com.au/business/reforms-pave-way-for-telstra-breakup-20090915-fof0.html


We should start by abolishing Comreg and once we have put something useful in its place we can legislate for the outcomes we should have had all along .

bealtine

Sponge Bob wrote: »

Unlike the morons in charge of policy in Ireland the Australian Government knows what it wants and will legislate for it . Their regulator is not getting in the way either , there shall be a "New Regulatory Regime"

This is one of the bits that shows how feasible it is to legislate for standards...
"The reforms also address the Universal Service Obligation (USO). The communications minister will be able to specify the standards, terms and conditions of services, connection and repair periods, and reliability requirements of the standard telephone service. Telstra will be required to meet new minimum performance benchmarks. Failure by Telstra to meet the requirements will expose Telstra to a civil penalty of up to AUD 10 million."

Requiring a telco to meet minimum standards is key to them delivering a decent service.

Another key concept is :
"provide the same price for its retail business and it does for other carriers in accessing its wholesale network;"

Sponge Bob

In Australia the USO issue is quite thorny, eircom does not have 50 mile long lines serving one house in the outback with termites aytin the poles .

http://www.dbcde.gov.au/__data/assets/pdf_file/0018/81531/ATUG.pdf

However government has a policy unlike our nincompoops who leave it to Comreg to provide a figleaf of universality .

SkepticOne

Eircom were talking about separation of wholesale and retail arms here a few years ago. The separated companies would not be under the same regulatory constraints and would be worth more. I would be in favour of allowing them to do this. It would be bad though for Eircom's resellers.

Sponge Bob

And then they tried to wangle €500m out of the government to compete with UPC in the cities by rolling out VDSL. The government did not bite !