In documents filed as part of an ongoing regulatory review of Australia’s telecom sector, the Australian Competition and Consumer Commission (ACCC) urged the government to consider the structural separation of national telco Telstra, proclaiming that such a step is needed to ensure equal access to a national broadband network (NBN) that the government plans to build in partnership with the private sector. In April, the government scrapped its tender process for the NBN and confirmed plans to build the NBN through a new entity that would be majority-owned by the government and in which private ownership would be capped at 49%. Like other carriers that had bid for rights to build the NBN, Telstra is invited to participate in the US $31 billion project. As Communications Minister Stephen Conroy stressed that regulatory reform is “urgently needed” to provide a wider range of service choices and lower prices for consumers, the ACCC argued that “structural separation is the only framework that will ensure equivalence in access during the transition phase to the NBN and is the only form of separation consistent with the type of wholesale-retail market structure the government envisages for the NBN environment of the future.” Telstra contends, however, that such a step is unnecessary as operational separation is already in place at the company. Telstra, in comments filed with the government, rejected the ACCC’s call for “costly functional separation” and instead called for the establishment of an independent adjudicator that would resolve equivalence and service level disputes between licensed carriers and competitors and whose recommendations would be binding. Adding that the NBN’s deployment would “make many of the current debates around Telstra’s position in the market redundant,” Telstra further suggested the implementation of an “enhanced price monitoring safety net” under which wholesale and retail service providers with substantial market power would be required to report to the ACCC.
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