The European debate about structural separation: possible implications for Australia

In the lead up to the review of telecommunications regulation in mid 2006, the European Unions Commissioner for Information Society and Media, Ms Viviane Reding, reignited the debate about the use of structural separation as a remedy for anti-competitive behaviour by incumbents.Despite the Commissioners initial enthusiasm for structural separation, following a detailed inquiry the Commission bowed to the weight of industry opinion and opted for the lesser remedy of functional separation in its subsequent October 2007 policy statement. The decision did not recommend that functional separation be mandatory, but that it should be implemented by national regulators at their discretion. Notwithstanding the rejection of structural separation by one of the industrys most influential policy/regulatory bodies, it remains on the Australian agenda and is at the core of the debate about competition and the planned national fibre to the node network (FTTN). If any group other than Telstra wins the present tender for FTTN, structural separation will be needed to roll out the network within the governments $4.7 billion budget. Should Telstra win the tender and accept the subsidy offered it may have to engage in structural separation to accommodate the public private partnership (PPP) for the network which is the governments favoured vehicle to deliver the new network. The article considers the recent debate about structural separation in Europe and considers its utility to the planned deployment of a national fibre to the node network