Government releases Telecom separation plan

All current and future network assets are to be held by separate network business unit

The government has released its consultation document on the operational separation of Telecom into three separate business units, making it clear all current and future network assets will be held by the network business unit.

The move is aimed at delivering "increased competition and efficient investment in infrastructure and services", the government says.

Noting New Zealand's position near the bottom of the OECD's broadband and telecommunications tables, Communications Minister David Cunliffe says it became clear that "without significant change to the competitive environment, our poor performance was destined to continue".

The consultation document is a requirement of Part 2A of the Telecommunications Amendment Act, which sets out the process for the minister to approve "binding and enforceable" operational separation undertakings made by Telecom.

The minister can also issue determinations of further requirements, over and above those in the act, with which Telecom's operational separation plan must comply.

Consultation on draft will be conducted over the next three weeks, with submissions to be provided to the Ministry of Economic Development no later than 5.00pm on Friday 27 April.

Cunliffe itemised the goals of separation in a statement released today. these are: To promote competition in telecommunications markets for the long-term benefits of end-users of telecommunication services in New Zealand; to require transparency, non-discrimination, and equivalence of supply in relation to certain telecommunications services; to facilitate efficient investment in telecommunications infrastructure and services.

To do that,Telecom will be separated into an access network unit, a wholesale unit and a retail unit.

The network unit will control the local access loop and backhaul assets, "including existing and future fibre and wireless access assets" the government says.

An independent oversight group will ensure the undertakings are implemented.

"The operational separation is expected to have a positive benefit on the competitive landscape by removing many of the opportunities and incentives for discriminatory behaviour by Telecom," the statement says.

"This, along with the improved transparency of costs and information that separation will deliver, will have a positive overall impact on competition and investment confidence by entrants, which in turn is expected to stimulate new investment."

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Tags telecom separation unbundling local loop david cunliffe telecommunications

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