Aussie Gov't regulatory reform paper branded a sham

Stuart Corner
Saturday, 13 June 2009 07:42

IT Industry - Strategy

"Until the paper is redrafted and offers more informed understandings based on the international evidence about the real utility of structural reform to fibre investment and enhanced broadband performance the paper can only further distort the debate in Australia and further limit the scope for productive investment which has already been held back by current regulatory settings."

Morgan dismisses structural separation as " a simplistic argument that has not found favour in any major market where incumbents remain vertically integrated and understandings of open access focus on non discriminatory access to anchor products such as bitstream rather than separation."

He claims it is an argument that has "seduced the expert panel advising the government," and that it "must have also brought comfort to the ACCC whose attitude toward Telstra's has been understandably coloured by the vilification it has suffered in recent years."

However it is hard to see how Morgan can vouch for the Expert Panel's seduction, as only a couple of pages of its report has been released and these make reference only "the desirability for a wholesale-only provider of any bottleneck infrastructure,"

The ACCC meanwhile has come out in its submission unambiguously on the side of structural separation saying "The ACCC considers that structural separation is the only regulatory arrangement that will in practical terms address Telstra's incentives and ability to discriminate against its competitors and thereby ensure equivalence...Structural separation is the legal separation of Telstra's assets and activities into separate corporate entities with entirely separate owners/shareholders."