The final piece of the NBN's regulatory puzzle fell into place yesterday, after the government secured a decision from the competition regulator designed to curb Telstra's dominance of fixed telecommunications. It is also the final hurdle to Telstra signing a deal with NBN Co.
By approving Telstra's plan to split its fixed wholesale and retail arms, the Australian Competition and Consumer Commission has cleared the way for NBN Co and Telstra to finalise an infrastructure-sharing agreement within weeks.
Under the deal, Telstra will gradually shut down its copper wire network as it transfers customers to the NBN. It stands to receive about $11 billion, at today's values, from NBN Co over 30 years.
Any move by the Coalition to shut down or substantially alter the NBN would now involve negotiating a new deal with Telstra and unwinding the complex regulatory process that finished yesterday.
The separation means Telstra will no longer own the infrastructure that it also uses to compete against other telcos at a retail level.
Broadband Minister Stephen Conroy said splitting Telstra was the ''holy grail'' of telecommunications reforms. Structural separation, as the reform is known, would finally ensure a ''level playing field'' and address a long-standing policy failure. ''This is a mistake that was made 20 years ago,'' he said, referring to the Howard government's initial decision not to split Telstra when privatising it.
He said scrapping the NBN - as promised by the opposition - would hold back competition because Telstra would no longer have to structurally separate.
Opposition communications spokesman Malcolm Turnbull said the Coalition supported Telstra's structural separation and upgrading broadband across Australia. But the Coalition would not release policy details until closer to the election.
Separation will not be complete until NBN Co finishes building its fibre-optic cable to replace Telstra's copper, which will be decommissioned except in rural and remote areas. Construction is expected to take 10 years and cost $36 billion plus the payments to Telstra.
ACCC chairman Rod Sims said the separation was a ''significant milestone in the structural reform'' of the telco industry. ''More effective competition in telecommunications markets will result in improved service offerings to consumers.''
The go-ahead from the regulator came a day after Telstra unveiled prices it plans to charge people for access to the new network.
Its initial offerings appear significantly more expensive than those of rivals. For example, Telstra's cheapest monthly phone and internet plan will be $80, compared with Optus' entry level $65 and Exetel's $35.
Telstra is also relatively expensive at the premium end, charging $150 for 500Gb of data delivered at the high speed of 100Mbps. iiNet, by contrast, will charge $110 for twice as much data delivered at the same speed. iiNet's price, however, does not include a modem, for which it will charge an extra $10 monthly.
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