ISPs penalised for seeking regulated service

Higher wholesale price for Ihug/Callplus because of ComCom approach

The Commerce Commission is looking into whether Telecom is charging ISPs Ihug and CallPlus more for their wholesale products because they are seeking a determination on a different plan.

Ihug and CallPlus have announced they will offer Telecom’s new faster 3.5Mbit/s download plans while they await the outcome of a commission determination into “unconstrained” speed plans. The commission has announced it will investigate the determination and has called for industry submissions.

However, because the regulated plan is different from the commercial plan on offer from Telecom, the commission has made it clear ISPs can sign up for the commercial offer without it affecting the determination process.

Both ISPs say Telecom is penalising them for going to the commission. Annette Presley, CEO of CallPlus, says her ISP is paying a higher price for the 3.5Mbit/s service with 128kbit/s upstream speed, a statement echoed by Ihug chief executive Mark Rushworth.

Ihug is prepared to put up with the higher price in the short term, Rushworth says, as the provider believes a determination for DSL with 7.6Mbit/s download speed and local loop unbundling is just round the corner. Asked how much more Telecom is charging, Ihug communications executive Annabel Gould referred Computerworld to Telecom.

Unlike the slower upstream speed service, Ihug is paying the same wholesale rate for the 3.5Mbit/s, 512kbit/s offering as the rest of the industry, Gould says.

Telecom’s head of wholesale marketing, Chris Dyhrberg, also refused to state how much the wholesale rate for the 128kbit/s upstream service is. Dyhrberg would only say that Telecom offered the 3.5Mbit/s, 128kbit/s service to CallPlus and Ihug as a second additional commercial product to the 512kbit/s one, as part of the suite covered by the ISPs’ existing commercial agreements.

As the 128kbit/s service is outside the new commercial unbundled bitstream (CUBS) deal, the terms for its supply are different from those offered to other ISPs who have signed up Telecom’s new commercial bitstream service, Dyhrberg says. He would not reveal the exact terms, however, saying that they are confidential to the parties to the agreement.

Dyhrberg adds that there is no restriction on either CallPlus or Ihug to proceed with their application for a regulated UBS (RUBS). He says that if Telecom’s commercial offers are not satisfactory and negotiations to improve them fail, operators are free to seek a regulated service as an alternative.

The Commission is corresponding with Telecom over the issue of ISPs’ access to its regulatory role, communications advisor Jacquelene Martin says. In the correspondence, telecommunications regulator Douglas Webb expresses concern that Telecom is again asking providers to contract out of applying for regulated UBS if they take up the commercial offer.

Telecom’s general manager of regulatory and industry affairs, Bruce Parkes, says in a letter to the commission that the telco is offering its CUBS as an alternative to RUBS. The offer is conditional on the provider contracting out of applying for any RUBS, Parkes adds.

According to Parkes, Telecom believes the Telecommunications Act 2001 expressly acknowledges that commercial agreements are left to the industry, and that there are no provisions in the law that constrains the terms.

Only if providers are unable to reach an agreement with Telecom can they apply for a regulated service, Parkes says in his letter to the commission.

This view isn’t shared by Webb, however. Responding to Parkes, Webb is concerned that Telecom is forcing ISPs to contract out of a bitstream service that is different from commercially agreed offerings, something the commission has already ruled against.

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