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Telstra slammed for breaches to structural separation undertaking

Adam Bender | May 28, 2014
Telstra has come under fire by a government regulator and a coalition of competitors for apparent breaches of the telecom giant's Structural Separation Undertaking (SSU).

Telstra has come under fire by a government regulator and a coalition of competitors for apparent breaches of the telecom giant's Structural Separation Undertaking (SSU).

In an annual report on Telstra SSU compliance tabled in Parliament, the Australian Competition and Consumer Commission (ACCC) revealed that Telstra breached the terms of its SSU on "a number of occasions" in the 2012-13 financial year.

Telstra failed to properly secure protected information from Telstra Retail employees, the ACCC said.

This data included confidential or commercially sensitive wholesale customer information provided to Telstra in its capacity as access provider of regulated services.

Also, Telstra violated the SSU when it introduced enhancements to its retail ADSL broadband service without providing the same upgrades to its wholesale service, the ACCC said.

Separately, the Competitive Carriers Coalition (CCC) condemned Telstra for another equivalence issue.

Telstra this month identified a "potential issue" resulting in instances where its retail tests showed that Telstra itself could provide ADSL service even though the wholesale tests used by its competitors showed ADSL could not be provided.

This effectively prevented certain customers from receiving ADSL service from anyone except Telstra.

"The potential issue arises as [service qualification] systems and processes for Telstra Wholesale customers search the current path used by the PSTN service, whereas the search for Telstra Retail also searches alternate paths," Telstra Wholesale group executive Stuart Lee explained in a letter to wholesale customers dated 9 May.

"This means there is the potential for some limited instances where Telstra Retail may have been able to supply an ADSL service where Telstra Wholesale requests have shown that the ADSL or LSS (line sharing service) is unavailable as the current path for the PSTN service suffers from excessive transmission loss."

Telstra said it was still investigating the issue and had reported it to the ACCC as a possible equivalence issue under the SSU. Telstra said it had also submitted a proposal to rectify the problem to the regulator.

"However, we believe the instances in which this has occurred are low."

ACCC action

The ACCC is working with Telstra to stop and prevent future improper conduct identified in the annual report. The ACCC is also working to minimise detriment to Telstra wholesale customers, it said.

"Telstra has responded to these matters in a positive manner and is remediating its systems and processes to ensure it meets its SSU commitments in future," the ACCC said.

ACCC Commissioner Cristina Cifuentes said the finding of SSU violations highlights the importance of the SSU.

"The breaches identified in this report are examples of the perennial competition issues arising from Telstra's vertical integration and demonstrate the importance of the SSU to ensure equivalence and transparency until structural reform of the telecommunications sector is realised."


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