Online reaction to Telstra’s not-quite-forced “structural separation” is split along razor-sharp lines. Telstra shareholders are angry. Everyone else is quietly jubilant — especially Telstra’s key competitors.

“The big winner from these reforms is the Australian consumer,” said Michael Malone, managing director of iiNet, Australia’s third-largest ISP.

“It is a landmark decision that has the potential to change the entire telecommunications landscape forever, resulting in considerable benefits for all Australians,” said Optus chief executive Paul O’Sullivan in a statement.

Optus, Australia’s second-largest ISP, says the government’s draft legislation “closely mirrors” its own proposed model from June. Its four key pillars: structural separation, open access principles, cost-based pricing, and ACCC oversight.

As Crikey reported yesterday, Conroy also preferred Optus’ cost modelling that suggests the NBN will have an end wholesale price about $60 per month.

At the other end of the spectrum, Roger Mangraviti, director of Independent Service Providers, a “boutique” ISP with just six staff, is cautiously optimistic.

“This isn’t the first time that the government has hinted or asked Telstra for structural separation … Even if the government did force a separation, that would take two to three years,” he told Crikey.

“I believe that if successful separation were to occur, it could result in cheaper access. One needs to remember that the major cost is not only the last mile but still predominantly bandwidth,” Mangraviti said.

If Telstra does split into wholesale and retail divisions — which, if the legislation passes, seems almost inevitable — the new retail business would supposedly buy access to the existing wholesale copper and hybrid fibre-coaxial (HFC) networks just like any other ISP. Similarly, the NBN fibre-to-the-premises network will be wholesale only, with all ISPs buying access on an equal footing — and with anyone able to offer their existing infrastructure as part of the NBN.

But what is to become of Telstra’s legacy copper network?

On Lateline last night, Senator Conroy indicated it’ll be ripped out as the NBN is built.

“It would be a very poor outcome if there were, ultimately, two pieces of fibre, and the expense of that to the economy.

“It’s very similar, as you’ll remember, to the rollout of the HFC cable where Telstra’s and Optus’ vans went down the same streets, dug up the pavement twice, strung two pieces of cable. This was a disaster. Five billion dollars was lost by Optus and Telstra lost many billions of dollars but protected their incumbency at the time…

“We welcome Telstra, Optus, any of the other potential vendors, to be part of our network and if that turns out to be a partnership with Telstra, it would see, as we lay the … fibre into the homes, we’d be taking the copper out. And we the NBNCo would become the sole connection from the kerb to the home.”

It will be the one true NBN or nothing, it seems. Did someone say competition?

Get more Crikey, for less

It’s more than a newsletter. It’s where readers expect more – fearless journalism from a truly independent perspective. We don’t pander to anyone’s party biases. We question everything, explore the uncomfortable and dig deeper.

Join us this week for 50% off a year of Crikey.

Peter Fray
Peter Fray
Editor-in-chief of Crikey
50% off