Telecom deal to pre-empt regulation

New 3.5Mbit/s service with 512kbit/s upstream ends full-rate DSL in NZ

Telecom wants ISPs to take up a new UBS deal that offers faster upload speeds instead of seeking a regulated service.

In the letter sent out to ISPs, Telecom sets out the wholesale pricing for four broadband services and says if there is broad acceptance of the proposal it will have the services ready by April 1. An installation credit of $88 is proposed and Telecom says it will give ISPs that wish to wholesale other products such as phone lines the same increased discounts that TelstraClear has been offered.

According to the letter, Telecom alluded to the changes in an earlier communication sent out to ISPs, following the wholesale deal.

Telecom spokesman John Goulter would not say if Xtra will release similar retail plans around the same timeframe, and denies that Telecom has gone out to the ISPs with plans or pricing.

Goulter says that Telecom is talking to ISPs about a set of wholesale principles. He calls it a “sort of a charter” which would guide Telecom’s actions in wholesaling. This would guarantee quality of service levels across retail and wholesale, Goulter says.

Furthermore, Telecom would commit to make available products it releases for retail to its wholesalers, Goulter adds.

David Diprose, general manager of regulatory and industry affairs at Ihug and president of ISPANZ, the New Zealand ISP association, is reluctant to talk about the proposal as Telecom insisted on confidentiality. However, Diprose confirms that Ihug and other providers are currently negotiating with Telecom over an improved UBS offer. He adds that it is important that any deal reached is an improvement over the determination left on the table by TelstraClear.

Asked if TelstraClear would get the same deal as the other ISPs, or be stuck with the terms it agreed to in December last year, group manager of communications, Mathew Bolland says Telecom will provide the second-largest telco with the cheaper and faster plans too. He would not be drawn on TelstraClear’s feelings over the pricing in the proposal being considerably lower than in the December deal, as well as containing a plan with a faster upstream speed.

The minister of communications, David Cunliffe, was not available for comment. Cunliffe has said he wants to ensure that telcos have quick access to a regulated service when the contracted one isn’t as good. This, Cunliffe says, will prevent the “contracting out” below a regulated minimum service standard.

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