Terria slams Telstra’s “scary” structural separation

While Terria (formerly the G9) has insisted that any proposed national network be split from the retail operations to ensure equal access to the infrastructure, Telstra has continually opposed this so-called structural separation.

In an interview with Radio National last week, Telstra wholesale chief, Kate McKenzie, said Tesltra’s opposition to structural separation was based on observations of it having not worked anywhere else in the world.

“Basically it hasn't worked anywhere in the world, it never will work anywhere in the world, it will add cost, it will add complexity, and it will get in the way of proper investment in the network going forward,” she said.

“These are big, complex networks, they need to be run efficiently, and adding cost and complexity and confusion, doesn't seem like a good idea to us.”

McKenzie’s structural separation denial was further compounded by comments made from Telstra chief finance officer, John Stanhope, who said the company's stance would not be side-tracked by the Government or the regulator.

"Shareholders bought and held shares in a company they believed would remain integrated and certainly not one that would face the spectre of intrusive regulatory meddling, and particularly not any form of enforced structural separation,” he said.

Stanhope’s comments were met with fire from Terria chairman, Michael Egan, who branded them as “scary” and warned Telstra not to assume it had an automatic right to own and operate all new telecommunications infrastructure.

“His [Stanhope’s] attacks on the current regulatory regime simply highlight Telstra’s belief that it has a divine right to do whatever it wants,” Egan said.

“Telstra should understand that regulation in Australia aims to create a level playing field that fosters, rather than prevents competition.”

Egan said monopoly infrastructure should be available to all access seekers on equal terms.

“Whoever owns the infrastructure, whether it is Telstra, Terria, or any other telco, is entitled to a fair return on their investment, but no more than that. That’s why independent regulation of monopoly prices is so important.”

“We now have a once-in-a-generation opportunity to promote competition by ensuring that whoever owns and operates any new monopoly network is a wholesale business only.”