Australia splits its top telco in two

Fulfilling another promise of its ambitious national broadband program, Australia's Senate has passed a bill that will split the country's biggest telco into separate retail and wholesale operations.

Telstra will also sunset a big chunk of its copper wire operation, making way for Australia's massive nation-wide fiber project. "Ever since Telstra was privatized Australians have suffered," Communications Minister Stephen Conroy declared shortly after the vote. "They have suffered with high prices, less competition and less innovative services. Today is about celebrating a significant win for Australian consumers." The government let go of Telstra in the late 1990s. But, over the coming eight years, Australia's taxpayers will fork over AUS$43 billion (US$38 billion) to build a "world-class broadband infrastructure." The project will deliver fiber-to-the-home to 93 percent of all households. We're talking open access and wholesale only. Every ISP will be able to tap into the system. As for Telstra -- or as a government report put it, Australia's "highly profitable vertically integrated and horizontally integrated incumbent with a monopoly position in most fixed-line access in many backhaul routes" -- the bill is intended to keep the company from favoring its own retail offerings over those of other ISPs that buy access to its network.