Commercial UBS the only immediate alternative

Regulated service only available after Commerce Commission carries out detailed determination

The confusion over Telecom's Unbundled Bitstream Service is easing, with both the Commerce Commission and Telecom clarifying the process for access seekers as well as details of the service itself.

However, providers that had held out for an improved, regulated UBS alternative will be disappointed. Despite statements from both Telecom and the Commerce Commission that said the regulated service will be available in September, the reality isn’t quite as simple.

While the commission’s UBS regulations will “come into force” on September 2, an access seeker cannot go to Telecom and ask for the regulated service. Instead, access seekers have to first try to strike a deal with Telecom over its commercial UBS. If negotiations with Telecom over the service terms and condition fail, the access seeker can approach the commission for a determination.

According to commission spokeswoman Jackie Maitland the determination process can take nine to 12 months. During this time, the commission is required to carry out a thorough determination that involves gathering detailed submissions from the interested parties and weigh them up before regulating the specific details of the service.

Maitland adds that for this reason, the Commission’s UBS was only specified at a “high level” without going into detail. Asked how access seekers could be expected to wait about a year for a determination with uncertain results in a fast-moving market, Maitland said the Commission was bound to follow the process set out in the Telecommunications Act 2001 and referred Computerworld to the Minister of Communications, Paul Swain.

Computerworld contacted both Swain and Associate Minister David Cunliffe by phone and email, but neither responded by deadline.

Confirming the commission’s explanation, Martin Butler, manager of strategy and planning at Telecom’s wholesale services group, says the exact details of any regulated UBS cannot be specified until the complete, detailed determination has been carried out.

Telecom has said it will offer UBS with 128kbit/s upstream and a downstream speed of 256kbit/s initially, going to 512kbit/s, 1Mbit/s and 2Mbit/s next year. However, access seekers can apply for different download speeds within that range.

The data backhaul service for UBS has been modified so that it can now be bought on a variable, per-customer charge basis instead of having to purchase a full 2Mbit/s connection to a Telecom ATM switch.

Instead, providers buying Telecom backhaul pay between $0 to $2.10 plus GST per customer, depending on the distance required for the backhaul circuit, with an additional charge for using its “core backbone network” of $2.85 per gigabyte (2.85¢ per MB) plus GST if the aggregate data usage exceeds 10GB per customer each month. Butler says the "B" step, the most common one purchased by providers, costs $0.90 plus GST a month.

Providers can however arrange their own backhaul in the areas where they intend to supply the commercial UBS. Such an arrangement is not subject to the excess charges over 10GB per customer and month, Butler says.

Butler says that "our backhaul service is deliberately designed to be flexible and cheap so that ISPs can offer national service offerings based on UBS."

It will also be possible for providers to offer static IP addresses, but Butler says the pricing for that service “would be referenced against a comparable retail offering” and not against Telecom’s “basic web-surfing retail services” without static IP addresses. Telecom’s ISP arm, Xtra, currently charges $30 per month including GST for a static IP address on its full-speed DSL plans.

While warning that UBS is not designed for latency-sensitive applications such as VoIP, video conferencing and virtual private networking, Butler says that there is nothing preventing wholesale customers from using the service for that purpose. However, Telecom does not warrant that UBS is suitable for such applications.

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