On 30 August 2011, the ACCC issued a discussion paper on Telstra’s Structural Separation Undertaking (“SSU”) and draft Migration Plan (“Plan”).  The SSU and Plan set out how Telstra will cease supplying fixed-line voice and broadband services over its copper and HFC networks, in order to supply these services over the National Broadband Network (“NBN”).  The undertaking also includes equivalence and transparency measures regarding access to Telstra’s wholesale services that will apply during the transitional period.

The ACCC’s preliminary view is that the SSU and the Plan cannot be accepted in their current form for reasons including that the SSU does not contain a compliance plan, which is a mandatory requirement under the legislation.  The discussion paper sets out a number of issues on which the ACCC is seeking views, including:

  • the interim equivalence and transparency measures regarding access to Telstra’s wholesale services;
  • the potential for future agreements between Telstra and NBN Co to obtain the benefit of the legislative authorisation without further ACCC scrutiny;
  • the enforcement mechanisms, which require that a failure to comply to be material before the ACCC can intervene; and
  • the operation and likely effect of the provisions that prevent Telstra promoting wireless services as substitutable for NBN Co’s fibre services and that limit Telstra’s ability to provide HFC services to new channel providers.

Telstra’s annual general meeting will be held on 18 October and it is aiming to obtain ACCC approval by that time.  If agreement is not reached, Telstra may still seek shareholder approval on the Plan and SSU.  ACCC approval is a condition precedent to the Definitive Agreements with NBN Co and the Commonwealth.