Telstra faces structural separation: Government ultimatum

Stuart Corner
Tuesday, 15 September 2009 07:48

IT Industry - Strategy

This latter course could be fraught with hazard as it would move the huge mass of services on which consumers, business, government and national security depend on the new network - a danger that Telstra has in the past been keen to highlight. Creation of a separate company to operate Telstra's PSTN assets should ensure that, technically they would operate much as they do today.

If Telstra does not agree to structural separation the bill provides for enforce functional separation along similar lines to that imposed in New Zealand.

Telstra would be required to conduct its network operations and wholesale functions at arm's length from the rest of the company; provide the same information and access to regulated services on equivalent price and non-price terms to its retail business and to non-Telstra wholesale customers; and put in place and maintain strong internal governance structures that provide transparency for the regulator and access seekers that equivalence arrangements are effective.

These would include the establishment of a single wholesale/network unit, separate from its retail business units, and a committee to be known as the Oversight and Equivalence Board reporting to the ACCC and Telstra board.