Continued calls for greater regulation of Telecom

InternetNZ and Tuanz to put pressure on government over broadband

Government needs to bring pressure to bear on "the dominant player" for higher quality and more competitive broadband services says InternetNZ president Colin Jackson.

An OECD survey taken in June places New Zealand 22nd out of 30 countries in the group, with only 6.9% of our population accessing broadband internet from home.

"The problem is basically poor supply, unavailable at a price and quality that people are prepared to accept," Jackson says. On the "quality" side, he cites particularly the severe limit on upstream bandwidth from Telecom, which restricts interactive applications.

If there is a restricted infrastructure, innovative applications that might encourage more New Zealanders onto broadband internet simpty will not happen, Jackson says.

"The cost barriers to computer acquisition and linking to the internet are high to begin with," he says. If a user takes the trouble to get connected and receives a huge bill for watching half an hour of video, then the message will spread among that user's acquaintances that broadband is simply not worth it.

The slow take-up is all the more disappointing because New Zealanders are usually enthusiastic adopters of technology, Jackson says. "We were actually among the earliest to get broadband; I had it in my home [as part of a trial] in 1996". But faced with costs and a less-than-complete service, New Zealanders are not adopting it.

Tuanz chief executive Ernie Newman is more particular about the failings in New Zealand's broadband infrastructure: "Telecom is simply not providing broadband at reasonable cost and speed, and is resistant to allowing its competitors to provide it over [Telecom's] network," he says.

Telecom needs to provide the unbundled bitstream (UBS) service in the form users and second-tier providers want it, rather than a limited form, Newman says. In its latest response to the arguments of the Commerce Commission "it's still talking about 72,000 customers having to have their existing service downgraded as the price of decent UBS. We don't believe the number is that big, but even if it is, Telecom should be investing to put it right. It's an investment issue."

The OECD figures do show encouraging growth in adoption over the past six months, but we still have a long way to go to catch up, says Jackson.

So what's the answer? "I'm hoping the new government will take a stronger line with the dominant supplier to improve its competitiveness and do something about the upstream data rate" The dominance of Telecom, he says, is an exceptional feature of the New Zealand telecomms landscape. InternetNZ will be pressing minister David Cunliffe to take action to improve competitiveness through regulation.

Wireless providers have entered the market Jackson acknowledges, "but progress seems slow. That could be for technical reasons; I'm not sure."

Telecom says regularly that it's local free calling that keeps most of the population on dial-up. That's a "self-serving" rationalisation, says Jackson and unlikely to be an issue of real significance. "I could repeat what Mandy Rice-Davies said about [scandal-hit 60s British war minister] John Profumo, 'they would say that, wouldn't they?'. For our biggest telco, 'lose free calling' seems to be the answer to any problem."

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