Governments on both sides of the Tasman Sea last month delivered the same message to their telcos - separate, or we will force you to.
Australian communications minister Stephen Conroy said he would legislate to force functional separation on Telstra if the company did not voluntarily separate.
The bill would require Telstra to conduct its network operations and wholesale functions at arm's length, and to offer equal terms to its retail and wholesale customers. Conroy said Telstra was one of the world's most highly integrated telcos, operating fixed-line copper, cable access and mobile networks. I
t also owns 50% of the country's biggest cable TV operator, Foxtel. But this announcement comes as the government is negotiating with Telstra over the terms of its participation in Australia's NBN program, which could require as much as A$43 billion ($37 billion) in investment.
Four months ago it floated a proposal of providing entry into the NBN program in return for Telstra tipping in its access networks, but the talks appear to have stalled. The announcement is clearly Conroy's attempt to shepherd Telstra toward a deal.
Telstra CEO David Thodey said he was disappointed by the announcement. "It is Telstra's view that many aspects of this package are unnecessary and need never be implemented if a mutually acceptable outcome can be reached on the NBN," he said.
Conroy's counterpart in New Zealand unveiled the details of its National Broadband Network plan, laying out a plan similar in intent to the path chosen by neighboring Australia. Communications minister Stephen Joyce said his government intends to roll out a dark fiber network to 75% of the population within ten years.
The resulting open-access wholesale network will cost an estimated NZ$1.5 billion ($1.08 billion), with funding for the project to be managed by a new government-owned investment company named Crown Fiber Holdings. Private players have been invited to establish a local fiber company, which would work in partnership with CFH to rollout fiber to certain region, and then manage the wholesale services in those regions.
Graham Walmsley, acting president of the ISP Association of New Zealand (ISPANZ), told Telecom Asia that ISPs generally supported the proposal.
But Joyce said that CFH would not work with any fiber companies that are controlled by operators that also provide retail services. If Telecom NZ wants to participate, it will have to structurally separate its retail and wholesale businesses.