Optus Slam Dunk Telstra Break-Up, ISPs Say Not To Be Trusted

Breaking up is hard to do. And even more so when your the No.1 player in Telco market.

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And last night Optus got the knives out to its biggest rival, insisting the proposed split won’t fix its current “monopoly” and “actually risks reinforcing Telstra’s dominance in the next decade and beyond.”

In its submission to the Consumer and Competition Commission (ACCC), Telstra’s proposed break-up and ‘migration’ of its retail and wholesale businesses is bad by design, although the concept itself would be good for the industry, only if done right, the Singapore telco warned.

And the competitive environment would only get worse under the forthcoming fibre optic broadband regime, which would give the telco “systematic long-term advantage on the NBN,” and will see David Thodey’s giant surrender its copper network over to the new national broadband company in return for $11 billion and lucrative contracts worth millions.

Telstra Structural Separation Undertaking and Draft Migration Plan also delinates the transfer of its fixed-line customers to NBN Co and the leasing of its pits and cuts to NBN Co to allow an easier fibre rollout.

However, there’s no need to throw the baby out with the bathwater, says Optus regulatory boss Andrew Sheridan, who proposed its rival make some appropriate ‘changes’ rather than “throw our hands in the air and saying everything is wrong”.

The Gillard government has already signed off on the deal.

‘Not to be trusted’

But Optus aren’t on their own. Fellow ISP’s iiNet, Internode and Adam Internet have also rejected Telstra’s break-up proposals, and have got the knives out – arguing the telco were not to be trusted, in their joint submission to ACCC.

In a similar vein to Optus’ core argument, the trio as Telstra wholesale customers, accuse it of giving an unfair home advantage to its own retail arm by pricing access and services differently for external customers, reports the Australian.

“There is no evidence to suggest that Telstra has turned over a new leaf,” the ISP’s argue.

“Therefore, as a matter of general principle, a situation where Telstra is simply trusted to do the right thing . . . should be avoided.”

Read NBN A Monopoly Waiting To Happen Warns Rudd Boffin As Telstra Roadshow Revs Up Here

ACCC chairman Rod Sims has already voiced criticism of sections of the agreement between Telstra and NBN Co, warning consumers interests will go out the window. Sims core argument centres around address legislative requirements but says resolution is within reach.

“This is something that is capable of resolution – it should not, need not, hold things up,” he told ABC radio earlier this month.

Submissions to the ACC closed last night.

Read Telstra NBN Problems Can Be Fixed Says ACCC Boss Here