Telstra submits final separation plan

Telstra has today submitted the final version of its structural separation undertaking (SSU) for the Australian Competition and Consumer Commission (ACCC) to approve, so that the company's deal with the government and NBN Co can go ahead.

The SSU sets out how Telstra's wholesale business will function in the interim 10-year period as the National Broadband Network (NBN) rolls out across the country.

"This further version addresses those drafting issues raised during the recent consultation process that were of concern to the ACCC," Rod Sims, ACCC chairman, said in a statement.

Telstra's competitors believed that there was too much scope in the former SSU for exemptions and limitations that would give Telstra enough leeway to show its own arm favouritism. They also feared that enforcement measures were likely to be ineffective.

To address concerns, Telstra has made changes to the latest version of its SSU to clarify its equivalence commitment, which lays out that Telstra would treat its wholesale customers in the same way that it treats its own wholesale arm.

Telstra CEO David Thodey said he is pleased that the ACCC feels that its concerns have been addressed.

The ACCC doesn't intend to consult further on the undertaking, it said, and is set to announce its decision on the document shortly. Its acceptance of the SSU is necessary for the Telstra-NBN deal to be finalised, which is necessary for the NBN roll-out to ramp up.

The ACCC was also concerned that Telstra's ability to charge too much for wholesale ADSL services wasn't sufficiently addressed in the previous SSU, so it decided to declare wholesale pricing recently. Another change that Telstra made to this version of the SSU is the inclusion of how wholesale customers could access reference prices for regulated services.

Major Telstra rival Optus is optimistic about the revised undertaking.

"While we are yet to review the revised SSU, it is encouraging that Telstra appears to have listened to concerns raised by the industry, and has made further changes to its undertaking to strengthen the commitments to delivering a level playing field," Optus general manager of Interconnect and Economic Regulation Andrew Sheridan said in a statement.

Telstra believes that most of the systems and compliance mechanisms that it would require to operate the equivalence and Transparency Framework could be ready within two months of the SSU coming into effect.