As expected, the Telecommunications Amendment Bill introduced by Minister of Communications David Cunliffe was passed in Parliament with overwhelming support. The only dissenting votes were from the two members of right wing party ACT, whose leader Rodney Hide stated that he sees the bill as theft of Telecom's property rights.
After the bill was passed, Cunliffe stated that "Kiwis are demanding fast, 'all-you-can-eat' broadband" and says the new legislation is designed to deliver this.
Promoting competition and equal access to wholesale telecommunications services will be achieved through Cunliffe drawing up a three-way operational separation of Telecom. The split will take place after public consulation, and both the minister and the Commerce Commission will be given powers to ensure that it will happen in a timely fashion.
After the bill has been passed into law, Telecom has twenty days to present an operational separation plan to the minister for consideration. The new regulatory regime provides for up to $10 million fines if Telecom is tardy with the operational separation into wholesale, network access and retail business units.
A comprehensive regulatory package, modelled on existing telco laws around the world, Cunliffe's bill introduces a large number of changes. Chief amongst these is unbundling, both at the local loop and sub-local loop level; that is, it covers both Telecom's exchanges and its distribution cabinets. Telecom is rolling out distribution cabinets at the moment, to replace exchanges and to shorten the length of the copper loop to customers in order to achieve higher broadband speeds.
The new regulation also provides access to so-called "naked DSL" for Telecom's wholesale providers, and removes restrictions placed on real-time services and upstream speed for the regulated unbundled bitstream service (RUBS) that the Commerce Commission introduced in 2003 in lieu of local loop unbundling.
New powers for the Telecommunications Commissioner are also part of the bill, so that he or she can monitor and enforce regulatory compliance.