The Commerce Commission has soundly rejected Telecom's claims over the dangers of delivering "unconstrained broadband" to its wholesale customers and has delivered TelstraClear a resounding victory in the ongoing regulatory battle.
The Commerce Commission has released a "statement for consultation" on TelstraClear's application for a regulated unbundled bitstream service (UBS), to give interested parties an opportunity to comment before October 27. After that date, the Commission's final determination will come into effect.
The commission says Telecom should provide UBS access seekers with DSL that has "a downstream PIR [Peak Information Rate] at the maximum technical capacity of the DSLAM". DSLAMs (Digital Subscriber Line Access Multiplexer) are the equipment in the exchange or roadside cabinet that connect customers' telephone lines to the network.
The PIR is around 7.6Mbit/s with the DSL equipment that Telecom uses, according to the commission. This is a departure from an earlier technical service specification for the regulated service released by the Commission in August, which recommended a PIR of 3.5Mbit/s.
Telecom submitted that providing such "unconstrained broadband" would pose a risk to existing customers through increased signal noise in the cable sheaths. This even though Telecom currently supplies DSL that isn't rate-limited and has done so since the inception of its Jetstream service in 1999.
However, the commission says that full-speed downstream DSL is not likely to give rise to any further risks than those already present. Even if additional risks were to arise, the commission says that the benefits of having an unrestrained service would outweigh them.
Telecom will also be asked to work out a weighted average Sustained Information Rate (SIR) every quarter. This is the average throughput rate that customers can expect, and which is set in the Telecommunications Act to 32kbit/s.
The pricing of the UBS service has also been reviewed by the commission. Its says there is no justification for Telecom to charge different wholesale rates for business and residential UBS, as there is no material difference for Telecom to provide the two which run over the same network and have the same service parameters. Therefore, a single, uniform wholesale rate will be provided by Telecom for both business and residential UBS to TelstraClear.
The commission has set the price TelstraClear will pay for "bitstream access" at $26.57 per connection.
Telecom's controversial "churn" fee, the money it charges other providers when customers switch to other to another ISP, is also deemed to be too high by the commission. Although Telecom has dropped the fee from $110 to $36.42, the Commission says a figure of between that number and $8 is more reasonable.
The time for Telecom to implement a regulated UBS has also been cut drastically short by Telecom. In its submission to the commission, Telecom says it needs a total of 20 weeks from from the date of the final UBS determination.
This is too long, the commission says, and expects it would take no more than four weeks for Telecom to ready the regulated UBS. This is because Telecom already has in place systems and business processes to deliver UBS to wholesale customers.
Upstream or upload speed is not mentioned in the Commission's document. Currently, Telecom limits this to 128kbit/s for its commercial proxy UBS and retail Jetstream service, even though an unrestrained ADSL service can provide up to 800kbit/s. This is due to an earlier determination by the Commission which saw a regulated bitstream service with a maximum upload speed of 128kbit/s being enacted as an amendment to the Telecommunications Act 2001.
Telecom's manager for government relations and industry affairs, Bruce Parkes reiterated the telco's position that providing unrestrained broadband would significantly impact its ability to service customers a long distance away from exchanges.
Parkes says that up to 72,000 customers in rural and urban areas will be affected by the unrestrained broadband. He adds that the commission has decided the risks to those customers are outweighed by the need to increase competition.
TelstraClear's head of government and industry affairs, Grant Forsyth, says his company is by and large pleased with the way the Commerce Commission's determination is going. Commenting on the increased PIR, Forsyth says the commission has reverted back to what it had in its draft determination, and adds that Telecom's claims of increased noise were just scaremongering.
As for the pricing, Forsyth says TelstraClear is still looking into how the commission has calculated it to make sure that there is a sufficient margin built in to make delivering the regulated service viable. He notes that providers of Telecom's current commercial proxy UBS have to cross-subsidise that service, however, indicating the price could be too high.
Asked if customers could expect the regulated service to deliver a full 7.6Mbit/s with only 128kbit/s upstream, Forsyth says that TelstraClear technicians have indicated that this is application specific. Some application which mainly download and do not use the upstream much will be able to run at the high PIR, but others which return data won't see such high download speeds.
Forsyth also puts a damp squib in expectations of the regulated service being available before Christmas. He says that while Telecom is currently supplying UBS to wholesale customers, TelstraClear needs to put in place data backhaul and ensure that its provisioning systems interface correctly with Telecom. Although work on this has already started, Forsyth says that TelstraClear needs to know the specifications for Telecom's systems to finalise the set-up.