Now or never for unbundling

Paul Swain will, in a couple of weeks, address his Cabinet colleagues on unbundling the local loop. If he recommends no unbundling, and they accept that recommendation, it'll be a decade at least before the question can be put again, if it ever is.

Paul Swain will, in a couple of weeks, address his Cabinet colleagues on unbundling the local loop. If he recommends no unbundling, and they accept that recommendation, it'll be a decade at least before the question can be put again, if it ever is.

Unbundling is an issue of extremes; there seems to be no middle ground. It's a case of long term versus short term, of efficiency versus expenditure, of old technology and new.

Telecom claims there is no need for unbundling, that the market is fine the way it is. New entrants building their own networks argue that their business model will be undermined if we unbundle the local loop. Technology purists, like Richard Naylor from CityLink, argue that unbundling is too little, too late and the only way forward for New Zealanders now is to build new networks of fibre to better future-proof our communities.

Users, and their representatives like TUANZ, argue that unbundling will have rapid effects on costs and uptake.

I find it difficult to believe that the best thing we can do to improve the competitive situation in New Zealand telecommunications is to require new companies to spend billions of dollars duplicating a network that isn't currently being used to its full potential. That just doesn't seem very efficient. This doesn't mean I can't understand the position of those building new networks -- they're eager to offer alternatives and can't wait any longer. Wireless, fibre, cable networks, even bean cans on long bits of string would be welcome if it helps drive up interest and demand while keeping costs down.

I'm wary of Telecom pushing its competitors to build new networks, because that's clearly in Telecom's best interests. If a competitor is spending the next decade building new network infrastructure it won't be able to compete with Telecom's already bought and paid for network any time soon. There's no advantage to the end user in having a second network if the company that's building it charges more than Telecom, but building such a network will cost so much that they'll almost have to give the service away to achieve anything approaching a competitive price. TelstraClear spent over $1 billion and has network capacity in parts of Wellington, Christchurch and the Kapiti Coast. To build a national network that could compete with Telecom's these companies will have to spend far more than that, and for what? A chance to offer service to a population of four million people? That's not much of a business case, is it? It's the kind of business case, in fact, that only a government would be able to sustain. Only a government could say "Well, there are only 150 houses in this particular settlement, but we'll run some infrastructure out that way just to be on the safe side".

That then is the crux of the problem. New Zealanders paid for Telecom's network and it was put in place on our behalf and sold off on our behalf. Now we're reaping that lack of foresight like never before. This is government's mess, whether the current crop of politicians were in the House or not. It's high time they lived up to the term "public servants" and cleaned it up.

Brislen is Computerworld Online'sreporter. Send letters for publication in Computerworld to Computerworld Letters.

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