Commerce Commission warning on Telecom's UBS 'too little, too late'

If ISPs wait for regulated service they could be too late to market

Politicians and regulators have been concerned for months that Telecom's vaunted bitstream offering doesn't comply with the service recommended by Telecommunications Commissioner Douglas Webb instead of unbundling.

Webb warned on Friday that Telecom's proposed unbundled bitstream service (UBS) doesn't match the service described in his recommendation against local loop unbundling, released in December last year and accepted by the government in May, and ISPs shouldn't confuse the offering with the regulated service.

“I would be concerned if the telecommunications industry participants signed up to the current Telecom commercial offer under the impression that it was a proxy for the regulated service,” he said in a press release. The release followed questions from Computerworld earlier in the week.

The commission gave no date when the regulated UBS should be available, apart from saying it will be come into force shortly. Unlike Telecom, which based its UBS on the existing retail Jetstream Surf 1GB plan, the commission wants a flexible service designed to promote competition through greater product differentiation from ISPs.

A brief service description describes the commission’s service as having a maximum upstream speed of 128kbit/s and a minimum downstream throughput of 32kbit/s, with an average of 256kbit/s.

In comparison, Telecom’s UBS has the same upstream speed, but the downstream speed offers a maximum 256kbit/s. The minimum throughput for Telecom’s service is 5kbit/s upstream and 10kbit/s downstream.

Unlike Telecom’s alternative, the Commission’s service does not stipulate any monthly maximum data volumes, nor does it disallow ISPs from providing residential customer with static IP addresses.

The specifications were outlined in a letter dated June 24 from Douglas Webb to Communications Minister Paul Swain. The letter was in response to a letter from Swain dated May 27 and shows that both were aware that Telecom’s service would not match the specifications of the regulated UBS.

TUANZ chief executive Ernie Newman congratulated the Commerce Commission on issuing a statement warning about the UBS promoted by Telecom. Newman says TUANZ agrees that resellers and users should wait for the official bitstream service drafted by the commission.

However, Newman also criticised the Commission for not explaining the regulatory process for ISPs. He says that ISPs are “smallish businesses focused on the day-to-day running of their operations. Against the commercial and legal might of Telecom they are lambs to the slaughter.”

James Watts, manager of Palmerston North ISP Inspire Net, says the process is taking too long. “I am disappointed that the Commerce Commission has taken so long to even act on Telecom's proposed UBS service that was released over three weeks ago," he says. "It’s just too little, too late.”

Watts says the Commerce Commission should have been proactively stating its case on July 26 when Telecom announced its product, not after ISPs have already signed wholesale services agreements, begun the UBS trial program, and started the launch of their new product range.

Hoping that Telecom will show good faith, Watts says it should match or better the proposed regulated service, given that the Commerce Commission decided against unbundling its network.

TelstraClear’s manager of industry and regulatory relations, Grant Forsyth, says the telco is currently negotiating with Telecom over UBS and agrees with the commission's warning over the service differences. “We have expressed some concern to Telecom that their proposed service is not fully equivalent to the regulated UBS,” Forsyth says.

Labelling the UBS as the “only potentially positive thing” to come out of the commission’s local loop unbundling investigation, Forsyth says TelstraClear is keen to offer the service but is frustrated it has taken so long for it to appear.

TelstraClear expects Telecom to offer a service that’s at least as good if not better than the regulated version, but at the same time places little faith in the effectiveness of the regulatory process. Forsyth says Telecom knows that seeking a determination from the commission to regulate the terms of the bitstream service — rather than accepting Telecom's UBS offering — would take six to nine month. By that time the applicant would be “kicked out of the market,” Forsyth says, as others reselling the Telecom UBS would have had captured the customers.

Join the newsletter!

Error: Please check your email address.

Tags UBStelecomTelstraClearbitstreamInspire Net

More about InspireNewmanTelstraClear

Show Comments