Revealed: Telstra's regulatory reforms wishlist

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Revealed: Telstra's regulatory reforms wishlist

Telstra wants an independent telecommunications adjudicator to be set up to resolve equivalence and service-level issues with access seekers.

In a submission [PDF] on regulatory reforms, the incumbent proposed the establishment of an adjudicator similar to the UK's Office of the Telecommunications Adjudicator (OTA).

The OTA was set up in late 2004 to implement processes "to enable competitors to gain access to BT's local loop on an equivalent basis to that enjoyed by BT's own businesses", the submission said.

Telstra proposed that the Australian version be appointed by the Government and be jointly funded by Telstra and DBCDE - at least, until the NBN transition begins.

"As migration to the NBN gets underway, the focus of the adjudicator could move to process and implementation issues regarding the NBN - and its funding model would change accordingly," Telstra said.

Telstra said it would be prepared to accept "binding" decisions handed down by such an adjudicator.

The UK OTA does not have the ability to make binding decisions.

Telstra proposed the role after earlier "acknowledging the concerns expressed by the Government, the ACCC and the wider industry" around equivalence and transparency.

"[We] recognise, despite our best efforts, the claims about whether Telstra treats its wholesale customers equivalently to its own retail businesses," Telstra said.

The telco said it would not support alternative proposals giving the ACCC the power to make binding rules of conduct.

Optus director of government and corporate affairs, Maha Krishnapillai, criticised the proposal.

"Instead of providing a constructive response, Telstra has instead proposed removing the independent regulator, the ACCC, and replacing it with a Telstra funded 'adjudicator'," Krishnapillai said.

"That is like a football team replacing the referee at halftime with one of its fans."

In the submission, Telstra also proposed what it called an "enhanced price monitoring safety net".

What this means is that the quarterly price equivalence framework (PEF) - an operational separation measure that requires Telstra to demonstrate that retail prices "are consistent with those you'd expect if Telstra Retail were a wholesale customer" - would be replaced by a real time monitoring process.

The process would allow the ACCC to assess, within 48 hours of each mass market price change for designated services, whether the change is consistent with price equivalence, according to Telstra.

The process would apply to any telco with "substantial market power" and both wholesale and retail operations, Telstra said. The submission did not define further who would be impacted.

Telstra also responded to suggestions in the original regulatory review consultation paper by saying it did not support proposals to divest its HFC cable network or "restrictions on its ability to invest and compete in content".

It also attempted to deflect suggestions it should be structurally separated.

"In this submission we have focused on a number of practical enhancements to address concerns without the need for costly functional separation, particularly given that structural separation is to be delivered through the NBN," Telstra said.

It also called on the Government to relax operational separation rules once the NBN transition is complete.

"After the rollout of the NBN and when NBNco is operating, the need for an operational separation regime applying to Telstra should be reviewed," Telstra said.

"It is unlikely to be necessary in the presence of a majority Government-owned, open access, wholesale only, fibre network."

In a statement, Competitive Carriers Coalition executive director David Forman called the submission "arrogant" and called on the Government "to prescribe the strongest reform medicine for Telstra" possible - structural separation.

"One can only conclude that Telstra either simply did not read the Government's regulatory reform options paper or decided not to take it seriously," he said.

"It is really quire remarkable that Telstra continues to think it can stand apart from the entire industry and the ACCC by pretending not to see what is now obvious to all - that its vertical and horizontal integration is at the heart of the communications market competition problems.

"About the only thing that can be said for Telstra's submission is that, at 28 pages, it is longer than the press release Telstra submitted instead of a proper NBN bid," he said.

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