Australian incumbent telco Telstra would be split in two if a government proposal is accepted voluntarily. Under the deal, the Australian government would offer Telstra the chance to buy up to 49 per cent of a new national broadband network if Telstra agrees to separate itself into a wholesale access company and a separate retail service provider business.
In a first step, Telstra would be "functionally" separated into a wholesale access company and a retail business. As part of this deal, where Telstra would still own both businesses, Telstra would have the chance to buy as much as 20 percent of the new broadband access company to be formed, but would contribute its present optical network to the new entity.
Such approaches to stimulating broadband competition are in place in the United Kingdom and coming in Singapore, with both Australian and New Zealand regulators looking at the concept as well.
Such institutional frameworks would allow a different answer to the question "can a service provider make a business out of dumb pipe" than is conceivable in North America or most other markets globally. By definition, one provider would sell broadband access connections to all other retail service providers.
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