ISPs, telcos silent over Telstra seperation

The Federal Government’s legislation on Telstra’s operational separation plan has garnered little response from a sceptical industry taken by surprise by the legislation, said industry expert Paul Budde.

At the end of June, Federal ICT Minister Helen Coonan said the government had set into stone a plan for the separation of Telstra’s wholesale and retail business units, to improve competition.

However the telecommunication industry has largely remained silent about this plan, due to scepticism about Telstra’s history of poor cooperation and the confusion about what the government is proposing to do.

Independent telecommunications expert Paul Budde said this was a positive step from the federal government.

“I think it’s a good step and heads in the right direction. However it might take sometime to get any results from the plan,” he said.

“The plan is set in legislation and will force Telstra to follow the principals laid out by the government. However changes won’t happen overnight and the telecommunications industry is unclear about what’s going on.”

Budde said the industry was taken by surprise on the government’s plans for Telstra and remained sceptical because it would not go towards solving their immediate problems.

“The industry has had very little opportunity to talk to the minister and amongst themselves about the operational separation plans. These companies are also distrustful because Telstra doesn’t corporate,” said Budde.

Michael Malone, managing director of local ISP, iiNet said the plan could provide the transparency needed to ensure Telstra’s wholesale pricing was kept fair.

“Right now we stand objective to this plan. It’s meant to show transparency in the way Telstra works out the pricing of services to wholesale customers,” he said.

“The government’s plan is to ensure the telco comes clean about what it actually costs to operate its fibre network and what it charges for a fair return on capital. Although this sounds terrific, it’s only the first step and we remain sceptical,” he said.

Ryan O’Hare, CEO of local telecommunication service provider, People Telecom said the plan had very little impact service providers.

“A couple of years ago the British government forced British Telecom to separate its wholesale operations in a similar model to the one being enforced on Telstra,” he said.

“The UK model has had very little impact on the industry and I believe the local enforcement will have very little impact on People Telecom and other service providers. I think if any affect is felt it would be from a network operator’s perspective.”

iinetmichael malonepaul budderyantelco/isptelecommunications