View Full Version : Unbundling Telecom Wires

23-12-2003, 02:58 PM
Seems like Telecom is here to control for longer....

Watchdog backs off unbundling

Dec 23, 2003

By Felicity Anderson

Telecom's rivals won't get access to the last little bit of copper wire at local exchanges.

But they will get more opportunity to compete in providing broadband internet services.

That's the upshot of the Commerce Commission's final decision on whether or not what's known as "the local loop" should be unbundled.

Unbundling the local loop would have opened up the network infrastructure of the former state owned telecommunications company to its voice service competitors.

Telecommunications commissioner Douglas Webb says the commission changed its mind about unbundling the local loop after weighing up the costs and difficulties compared with potential benefits.

A last minute offer by Telecom also helped.

Webb says a direct focus on high-speed internet access produces higher benefits for consumers through lower prices and innovation.

It will also act as a spur to furthwer improvements in Telecom's efficiency.

Communications Minister Paul Swain says he will take his final recommendations to Cabinet early next year after giving interested parties one final chance to comment on relevant matters "they have not previously commented on".

Those submissions, including a public electronic version, should reach the minister by February 9, with cross-submissions due by March 1 next year.

In its decision, the commission has recommended:

unbundling of, and interconnection with, Telecom's fixed Public Data Network in the form of access to an asymmetric Digital Subscriber Line (DSL) bitstream access service, with the initial pricing and final pricing principles based on a retail minus methodology; and
access to a backhaul transmission service used in conjunction with an asymmetric DSL bitstream service. The commission recommends that the initial pricing principle should be based on benchmarking and the final pricing principle should be based on cost-based pricing (TSLRIC methodology).
Webb says the commission is not recommending the unbundling of other elements of Telecom's fixed Public Data Network beyond those supporting the asymmetric DSL bitstream service.

"The decision not to recommend unbundling of other elements has been influenced by Telecom's recent announcement of an Unbundled Partial Private Circuits services offer that has the potential to provide a commercial solution to a competition problem in the supply of high grade data services to corporates and other large users," he says.

"The commission would have favoured further unbundling had Telecom not offered a market-led solution.

"We think the Telecom proposal has potential to meet the needs of the industry and major business users."

But Webb warns the telco watchdog will be watching carefully and if a "suitable outcome" fails to eventuate within the next six months, it will look again at the unbundling issue.

The commission's report to the Minister of Communications is available on its website (http://www.comcom.govt.nz/telecommunications/localloop.cfm)