The deconstruction of telstra - where are we with this??

Something that often surprises me is that the deconstruction, or structural separation of our largest communications network hardly gets noted in the media these days despite representing a fundamental change in the way our telco's will operate with one another.

To recap, let's start with what happens at the moment - well, as we know Telstra was born out of Telecom when the Howard government first began its privatization of the Telco beast - and because it was the first it owned all the networking hardware, so when Optus entered the market, Telstra wholesaled services to them, and then to the other players in the market, which includes all the ISP's - what the means for the market is that Telstra has the ability to keep the wholesale prices high through their Whole division, to support greater profits within their Retail division. 

The theory is that if Telstra is structurally separated into two stand alone operations, one is the network wholesaler, and the second is the Telstra the retailer that buys it's services from the wholesale the same as all the other networks and network related co's, we should see pricing for services reduced, because now they're all on the same playing field - well, that's my hope anyway.

So where are we at the moment? Telstra were due to submit it's plans for separation to the ACCC on April 1, but that didn't happen, and now they have been given a further 90 days to do so.

It's something that fundamentally has to happen - and we've seen this sort of thing in other countries like the UK where British telecom was separated, and side from the currently arrange Telstra enjoys as being anti-competitive in a capitalist market place, the other issue is that Telstra has become a beast too big to govern, i.e. they are so big they stop having to worry about being bound by laws that other companies wouldn't be able to get away with.

I think that's the reason why Senetor Conway didn't involve his special powers to forcibly separate the company himself and instead give a 90 day extension to Telstra to get their plan together.

I understand Telstra doesn't want to separate their business, but it's not all doom and gloom, look at Bill gates, he's still got stacks of cash after Microsoft were forced to give up it's monopolies within numerous countries, including the US. Plus what's the alternative? Telstra dig their heels in, don't get a slice of the NBN and at the end of the day still have to relinquish their wholesale business?

So I know I'm waiting with baited breath to see what happens next!!

Enjoy,
C