Unbundling 'increases services, drops prices'

Tuanz speaker draws on personal experience

Local loop unbundling comes highly recommended by the man who oversaw the liberalisation of Denmark's telecomms regime.

Jorgen Abild Andersen, the director-general of the Danish telecommunications regulatory authority since 1991, gave the keynote address at the Tuanz Telecommunication Day in Wellington yesterday. Andersen summarised Denmark's liberalisation process, which started in the late 1990s, and compared it with New Zealand's. In particular, he praised Denmark's and other nations' decision to unbundle the local loop, which has resulted in a greater diversity of services in Denmark, Andersen says, and the price of broadband access has dropped between 50 and 60% over the past five years.

Andersen compared infrastructure competition – having more than one medium competing in the same geographical area – with services-based competition on the same medium, and sees more scope for positive outcomes in the former.

If services have to rely on one incumbent’s copper, even if it is fully unbundled, the maximum reliable bandwidth is about 2Mbit/s, he says, which is inadequate for “double and triple play” services where internet is combined with voice and TV services.

But he acknowledges that services-based competition is an appropriate starting point. European Community telecomms regulators have conceived an image of “climbing the ladder of investment”. This means a start on services-based competition with simple resale, then moving to bitstream access. When an unbundled network on the basis of DSL is in place, the move can be made to infrastructure-based competition.

At all times, the network providers must be careful to take the service providers with them up the ladder, not creating such large gaps between the cost of one infrastructure type and another as to inhibit movement.

The move up the ladder also implies a move from supply push to demand pull, Andersen says. He complimented the New Zealand government on its Digital Strategy, which he sees as stimulating that demand.

Communications and IT Minister David Cunliffe chose his speech at the conference to “launch” the antispam Bill tabled in Parliament last week. The proposed legislation is based on customers opting-in to receive commercial messages. “Non-commercial” organisations are not placed under that restriction, but message recipients should have opt-out requests honoured.

The Department of Internal Affairs has been named as the enforcer, but customers will be urged first to complain to their ISP or other service provider. The legislation is planned also to apply to texting and instant messaging.

The industry has a role to educate customers, Cunliffe says, and a programme for this has been constructed under the auspices of the Internet Safety Group.

The Government has signed up to multilateral memoranda of understanding on spam with other Pacific nations, he says.

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