Telecom works on wholesale

As the inevitability of the government's refusal to enforce local loop unbundling sinks in, Telecom is working on a wholesale strategy designed to keep its competitors from going to the Commerce Commission.

As the inevitability of the government’s refusal to enforce local loop unbundling sinks in, Telecom is working on a wholesale strategy designed to keep its competitors from going to the Commerce Commission.

Strategy and planning manager Martin Butler says the wholesale unit is developing two services to offer other telcos and ISPs that should be operating later this year.

“We realise that if we offered a service that our competitors found unpalatable they’d simply pay the $20,000 and go to the commission. We’re trying to offer a service that’s workable for all concerned.”

The first service, unbundled partial circuits (UPC), will allow competing ISPs to use Telecom’s network in areas where there is no competition. This service, to be aimed at business users, was put forward by Telecom during the Commerce Commission’s deliberations on unbundling and is part of the reason the commission decided not to require unbundling of the local loop.

“We hope to get it out into the market by June. Originally we said July but that’s moved forward since then.”

As a layer two rather than layer three network service, competitors could use the connection any way they like, says Butler, effectively having control over quality of service. Layer three services merely allow ISP customers to watch the traffic go by without being able to shape or change any of the services they were on-selling.

“They get to put whatever they want over the network and we don’t see what it is at that level. It could be video conferencing, IP, frame. It’s pretty much protocol-agnostic.”

Telecom has undertaken not to offer the product directly to corporate customers.

The second service, Telecom’s unbundled bitstream service (UBS), is aimed at residential broadband users and will also allow access at layer two.

“Initially it will be the 256kbit/s downstream, 128kbit/s upstream that the commissioner has recommended.”

Butler says that is likely to change over time to allow ISPs to resell other services at different data rates, but probably not for a year or more.

ICONZ general manager Sean Weekes says the service sounds fine in principle but it will have little short-term market effect.

Weekes says ICONZ is interested in the entire wholesale suite.

“It should allow us to offer products and services as our customers require.”

Weekes says he believes the government will stick with the commissioner’s recommendation not to unbundle and so it makes sense for ICONZ from a business perspective to review the alternatives.

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