ACCC accepts Telstra SSU

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29 February 2012

Yesterday, the ACCC accepted Telstra’s structural separation undertaking (SSU) and approved Telstra’s draft migration plan. In so doing it paved the way for the Definitive Agreements (DAs) between Telstra and NBN Co to come into effect and the commencement of the full scale migration of customers off Telstra’s copper network onto the NBN.

Before accepting the SSU, the ACCC had to be satisfied that it provided:

  • for transparency and equivalence in relation to the supply by Telstra of regulated services to Telstra’s wholesale customers and Telstra’s retail business units from when the undertaking comes into force until 1 July 2018;
  • for the ACCC to monitor Telstra’s compliance with the undertaking; and
  • that Telstra will have an effective compliance program.

The SSU is part of a major structural reform that includes commitments by Telstra to progressively cease supplying voice and broadband services over its copper and HFC networks; as the NBN is rolled out across the nation and regions become ready for final cutover.

During its consultation, the ACCC expressed particular concerns regarding:

  • Telstra’s compliance program and the ACCC’s ability to monitor Telstra’s compliance with the SSU;
  • Telstra’s interim equivalence and transparency measures; and
  • the commercial arrangements contained in the Definitive Agreements between Telstra and NBN Co.

The ACCC is now satisfied with:

  • Telstra’s redrafted commitment to separation compliance, consultation and reporting;
  • improvements to the price equivalence arrangements for wholesale ADSL, including ring fencing and appropriate dispute resolution arrangements; and
  • the amendments that have made to the Definitive Agreements, which now provide for:
    • ACCC review of any variation to the Definitive Agreements under the Substantial Adverse Events clause, set out in a related joint s 87B undertaking given by NBN Co and Telstra;
    • the restriction on Telstra promoting wireless services as being substitutable for fibre services being replaced with a requirement that Telstra must meet existing Australian Consumer Law provisions; and
    • Telstra being able to continue to supply the independent channel providers that currently use its HFC network to supply end users on the Foxtel platform.

The ACCC’s final decision follows three rounds of SSU submissions, which started on 29 July 2011.  The SSU and migration plan will come into force once the Minister exempts Telstra from any requirements to divest its HFC and Foxtel networks.


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James North

Partner. Sydney
+61 2 9210 6734

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