Telstra's structural separation undertaking

The two rectification proposals relate to:

• BTS fault rectification
• the ‘retest of line fault’ process

A brief overview of these rectification proposals is provided below.

The ACCC may accept a rectification proposal if it is satisfied that it provides an effective remedy for the possible breach. If it is not satisfied, the ACCC may issue a direction requiring Telstra to take alternative steps to remedy the breach.

The ACCC provided summary versions of the rectification proposals to wholesale customers via its Wholesale Telecommunications Consultative Forum (WTCF) mailing list and sought feedback. Wholesale customers not on the ACCC’s WTCF mailing can contact David Cranston to request to be added to the WTCF mailing list.

David Cranston
(03) 9290 1971
david.cranston@accc.gov.au

On 15 November 2012, Telstra reported a possible breach of its overarching equivalence commitment to the ACCC in respect of its performance for rectifying BTS faults. The possible breach came to light following Telstra’s submission of its operational equivalence reports for the June and September 2012 quarters. For these quarters, Telstra reported significantly better performance in repairing BTS faults by specified timeframes for retail services than wholesale services. The ‘variance’ between retail and wholesale performance for this Metric 5 was more than 2 percentage points.

While Telstra identified inclement weather, high demand and the high number of medical priority tickets of work for Telstra Retail customers as possible causes, Telstra reported two additional factors which may have also contributed to the reporting variance:

• Since around October 2010, some Service Delivery contact centre staff were incorrectly allocating an increased key/corporate level of severity to a number of Telstra Retail customer BTS faults (primarily business customer faults), rather than the standard severity level. Once this potential issue was identified, Telstra issued formal communications to its contact centre staff advising them not to incorrectly increase the severity level of faults.
• During a system update on 4 February 2011, a system code was removed. This system code previously elevated the level of priority allocated to certain wholesale BTS faults to the same level that was automatically given to Telstra Retail business BTS faults. The practical effect of this system upgrade was that business BTS faults lodged by wholesale customers that had not yet migrated to eBill were allocated a lower priority than Telstra Retail business faults. On 15 November 2012 Telstra reinstated the system code.

After submitting a rectification proposal to the ACCC in November 2012, Telstra engaged the Independent Telecommunications Adjudicator (ITA) at the ACCC’s request to look into the matter. The ITA concluded in September 2013 that the measures set out in the rectification proposal would be of some benefit in terms of equivalence but would be unlikely to lead to a change in the reporting variances. In the ITA’s view, the most likely explanation of the reporting variance is the effect of dealing with medical priority assistance faults.

This matter, including the investigation and possible explanations for the variance, are set out in detail on pages 35-39 of the ACCC’s 2012-13 Annual Compliance Report on Telstra’s compliance with its SSU.

Telstra submitted revised rectification proposals in May 2014 and September 2014 following ongoing discussions with the ACCC on issues raised by the ITA report and submissions from the ITA and two wholesale customers.

The ACCC accepted Telstra’s revised rectification proposal in October 2014. The key aspects of the revised proposal are that Telstra:

• will implement Workflow Management Tools during periods of high faults to better align resources with the volume of work required
• will report to the ACCC on whether staff are allocating a correct level of severity to Telstra Retail customer BTS faults, and
• will retain an IT system code that elevates the level of priority to certain wholesale BTS faults

Telstra’s revised rectification proposal also includes statements that:

• Telstra has no intention of ceasing its use of the Workflow Management Tools following expiry of the rectification proposal on 31 March 2015
• should Telstra report a negative variance of more than 2 percentage points in future and need to provide an explanation, it will advise whether the Workflow Management Tools were in use
• Telstra has no intention of removing the IT system code that elevates the level of priority to certain wholesale BTS faults following expiry of the rectification proposal on 31 March 2015.

The ACCC is satisfied that Telstra’s revised rectification proposal provides an effective remedy for the possible breach and will provide competition and consumer benefits from Telstra allocating greater resources during periods of high fault rates.

The ACCC has published Telstra’s rectification proposal to promote transparency and to assist the ACCC to monitor Telstra’s compliance.

Under Telstra’s retest of line fault (ROLF) process, BTS fault tickets which have been remotely tested and found to have no network fault after being notified to Telstra are re-tested to confirm whether the fault lies in Telstra’s network prior to dispatching field staff. If the ROLF process confirms that there is no fault on the line, the ticket of work (for both retail and wholesale customers) will receive a ‘no fault found’ result.

In April 2014 Telstra reported a possible breach of the equivalence provisions in the SSU in respect of the different processes followed for advising Telstra Retail customers and wholesale customers when the ROLF process returns a ‘no fault found’ result. In some instances, wholesale customers were not advised that a ticket of work had received a ‘no fault found’ result before the ticket of work was closed.

In May 2014, Telstra submitted a rectification proposal in relation to the ROLF process for BTS fault tickets.

The ACCC accepted Telstra’s rectification proposal in July 2014. Following a targeted and confidential consultation with wholesale customers, only one submission was received and it was supportive of the rectification proposal. The ACCC decided that the proposed steps set out in the rectification proposal will be effective in remedying the specific matters that Telstra considers have given rise to the possible breach.

The ACCC has published Telstra’s rectification proposal to promote transparency and to assist the ACCC to monitor Telstra’s compliance.