Split up Telecom and include NGN in regulation: ISPANZ

30 member ISP association pushes for stronger action

The New Zealand ISP association ISPANZ, which comprises most providers except for Telecom's Xtra, wants the new regulation to ensure retail parity as well as consultation on the Next Generation Network rollout.

In its submission to the Parliamentary Finance and Expenditure Select Committee that is currently deliberating on Communications Minister David Cunliffe's Telecommunications Amendment Bill, ISPANZ says Telecom has a long way to go in treating its wholesale customers the same as its retail arm, Xtra.

Customers of wholesale ISPs experience slowdowns due to congestion that Xtra users do not, ISPANZ president David Diprose says. Telecom also demands that wholesale providers invest in "outdated ATM equipment" to connect to the telco with for the CUBS backhaul. However, Diproses says that Telecom Xtra gets its backhaul via cheaper and faster Ethernet circuits, something that leads to much higher costs for the wholesale providers he adds.

Telecom is also keeping details of its Next Generation Network (NGN) secret from wholesale providers. This is unlike BT in the UK, which is required to consult with the industry on the NGN. The NGN in both UK and New Zealand is being built by Alcatel, which is Telecom's network manager.

ISPANZ is concered that Telecom will keep the upcoming NGN services for retail only, leaving wholesale customers with legacy products.

Going beyond the government's proposed legislation, IPANZ is advocating operational separation for Telecom because its present proposal is very different from the BT model, Diprose says. Full operational separation is needed to ensure "equivalence of inputs" between wholesale providers and Telecom Xtra.

Lawyer Michael Wigley was retained by ISPANZ to present on the existing laws. He says they don't work for the telecommunications industry. The law is too slow, and too expensive, Wigley says. Australia, which had the same problem, introduced sector-specific competition law to deal with anti-competitive bundling, pricing and other issues.

Australia's "competition notices" whereby the regulator, ACCC, can hand such a notice to carriers like Telstra, if it believes there's a breach of the law, should be introduced in New Zealand Wigley says. The notices permit ACCC to fine the carrier up to A$21 million for the first three weeks and A$3 million a day after that, if the behaviour carries on.

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