Telstra split ‘won’t fix monopoly’ according to rivals

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Telstra split ‘won’t fix monopoly’ as rivals fear reform will fail | The Australian

My comments

A lively competitive market

When I think of a competitive broadband infrastructure, it needs to be lively and competitive with many different wholesale and retail Internet service providers. Here, I would rather see the competition occur more on value than on who offers the cheapest service.

What can happen if the competitive market focuses on who offers the cheapest service is that companies can cut corners to achieve this goal. This can lead to situations that are consumer-hostile like poor customer service, rigidly-enforced terms of service that don’t allow scope for human variation and budget-tier services that don’t offer what customers need.

The proposed Telstra split

This proposed wholesale-retail breakup of Telstra could sound very much like what is happening with British Telecom in the UK. At the moment, BT are running a retail arm as well as a wholesale-infrastructure arm called Openreach.

In the case of the Telstra split, the infrastructure would be managed by a monopoly which is the National Broadband Network while there is a “wholesale” group and a “retail” group. There will be issues like preferential tariff sheets for the Telstra service as well as something yet undiscussed.

Telstra as the baseline telecommunications provider

This is the provision of the baseline telephone and Internet service. It encompasses the maintenance of public payphones; the definition and provision of the standard telephone line; the provision of the national emergency telephone services, as well as communications needs for the social sector. It can also include covering for communications through natural and other disasters. At the moment, Telstra’s discretionary mobile and Internet services prop up their role as this baseline telephony provider.

What I would also like to see is an improvement in how the baseline telecommunications service is provided and funded for. This could involve the use of tenders to determine the provision of parts of the baseline telecommunication service as well as the creation and management of universal-service funds that subsidise the provision of these services. This avoids the need for a service provider to jack up the price of discretionary services to cover the costs associated with the baseline services.

Wireline infrastructure competition

One driver for real competition is the ability to supply competing wireline infrastructure. This typically comes in the form of sub-loop unbundling where an ADSL service can be provided through the use of equipment installed between the customer’s door and the exchange and the customer’s line connected to that equipment. In an FTTH fibre-optic setup, this would be in the form of extra fibre-optic lines controlled by competing interests run to the customer’s door; a practice that is taking place in France.

For that matter, it may be worth examining what is going on in the UK and France where there was incumbent “PTT” telephone carriers but have now become lively competitive Internet-service markets. This includes how the tariff charts yielded “best-value” plans for retail telecommunications service as well as enabling factors for this level of competition. such as telecommunications legislation and regulations. It would also cover access to established physical telecommunications infrastructure in public areas like poles and pits; as well as creation and use of new infrastructure.

Conclusion

What I would like to see is that our telecommunications ministers and departments talk with their peers in both those countries ie OFCOM in the UK and ARCEP in France so they can know what was achieved for competitive telecommunications.

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