TUANZ lobbies MPs over unbundling

The Telecommunications Users Association (TUANZ) has launched a last ditch lobbying effort to explain unbundling of the local loop to New Zealand's MPs.

The Telecommunications Users Association (TUANZ) has launched a last ditch lobbying effort to explain unbundling of the local loop to New Zealand's MPs, however Telecom rejects its claims and says TUANZ itself is out of touch.

Chief executive Ernie Newman has sent out a 20-page book outlining TUANZ's point of view on the unbundling issue.

"It would be a tragedy for our economic development if we let this opportunity pass. I'm sure that Paul Swain as the [communications] minister understands that ... the question is whether political reality will allow him [to make the right decision]."

Newman sees TUANZ's role in the debate as being to help MPs understand the issue so they can allow Swain to call for the local loop to be unbundled.

Swain is to report to cabinet in the middle of May on the Telecommunications Commissioner's report into unbundling. The report rejects calls for New Zealand's local loop to be unbundled, putting New Zealand at odds with the rest of the OECD, says Newman.

Newman argues that telecommunications in New Zealand is the last of the protected markets and that unbundling is simply a way of finishing the job started in the 1980s - the removal of protectionist barriers.

"Around 20 years ago we made huge strides in turning this economy from a protectionist one to an open one and every industry has had to face up to competition."

Newman believes it is no coincidence that Telecom is the largest share market company.

"There is something wrong when the largest company to emerge from that process is in the service industry trading on the back of a former state-owned monopoly with the advantage of being a network that faces no international exposure in terms of competition."

Newman says Telecom has nothing to fear from unbundling and plenty to gain.

"If Telecom is not making monopoly profits and their pricing and services are world class as they'd have us believe, then why not remove the protectionism?"

Newman says not unbundling the network is a form of protectionism.

"If they're as good as they say they will stand on their own feet and be a successful and dominant supplier. If that's not the case as we suspect then exposing them to the same competitive pressures will stimulate them into action and be of benefit to the whole community."

However, Telecom's general manager for government relations Bruce Parkes says TUANZ has lost perspective on the issue and is in danger of marginalising its own support base.

"Hugh Fletcher reviewed the industry in 2000 and rejected unbundling. A select committee reviewed it and rejected unbundling. Douglas Webb has spent a year reviewing it and rejected unbundling. Experts from around the world have told us that unbundling doesn't work. It amazes me that TUANZ still has this almost fundamentalist belief in unbundling."

Parkes says unbundling is one of the "biggest handbrakes" the industry has ever seen to long-term sustainable growth and says any advances the industry has made world wide over the past five years has been despite unbundling not because of it.

"It is a universal impediment to investment. The effect of unbundling across the globe has been to significantly retard competition."

Parkes says TUANZ doesn't understand how a network provider like Telecom operates and downplays the role of a long-term investment strategy.

"I think TUANZ needs to address these issues because it's not doing its user base any favours by continuing down this path."

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