Bundled up

What a Christmas present that was. There was I, mulling over my options in a post-unbundling world, when all of a sudden Santa Douglas delivered a whopper right down the chimney.

What a Christmas present that was. There was I, mulling over my options in a post-unbundling world, where the next couple of years would be really dull and boring while the usual teams of lawyers argued and fought their secret battles over terms and definitions, when all of a sudden Santa Douglas delivered a whopper right down the chimney. Golly, I said as I swung in my hammock, that'll give me something to write about.

And so it has. The Commerce Commission's telecomms division has said no to unbundling even after its draft report supported it and even though the rest of the developed world (Mexico not included) has rolled it out.

But what exactly does it all mean? Well, it's not as bad as some have suggested -- I saw one posting somewhere that claimed Telecommunications Commissioner Douglas Webb had clearly been bribed. I really don't think it's gone quite that far and in fact the commissioner seems to be continuing his current trend of not pleasing any of the telcos any of the time. If they all disagree with his decision, as I wrote some time ago, he's clearly on the right track.

Unbundling would have given any and every telco access to Telecom's network. Putting aside the several thousand pages of argument over exactly which bits of the network are and aren't included, it came down to all of Telecom's local network being opened up to competitors who would stroll in, plunk down their equipment and start offering a complete telco service. This hasn't happened overseas to any great extent for two reasons: firstly, it's an expensive business buying all those duplicate DSLAMs and stuff and trying to shoehorn them into small local exchanges and secondly, the telcos don't really want to compete over voice, they want to slug it out for the data market.

Voice is a dying market, even though Telecom still makes around $1 billion a year from it. When Telecom introduces its all-IP network, voice will be nothing more than another packet trundling across the network. That bears remembering over the coming months: voice is only data.

So instead of full unbundling, the commissioner has recommended what's called bitstream access. Basically Telecom will be required to sell a wholesale DSL product to other telcos for them to sell on to the likes of you and me. It replaces the existing resale system that means every ISP sells practically the same version of JetStream as everyone else. In the next year companies like TelstraClear and ICONZ and all the others will be negotiating deals with Telecom to provide DSL services they way they want. Instead of one or two speed points for all, we should expect to see different speed points married with different traffic caps as the telcos vie for different market segments.

That's the good news - the bad news is that it only applies to ADSL, the asymmetrical (faster download than upload) model that Telecom currently deploys. The report spends a lot of talking talking about the benefits of xDSL -- suggesting more than one variety of the technology, some of which are faster or symmetrical -- and then only recommends ADSL be wholesaled.

On top of that, the service the commissioner is recommending is woefully limited. It must be asymmetrical with at least 128kbit/s upstream and 256kbit/s down. It doesn't have to be capable of offering voice. It doesn't have to be capable of offering real-time applications, which presumably means no video conferencing and no gaming. And all it will take for all this process to start over again is for Telecom to introduce a new type of DSL and restrict the wholesaling of it we're back to square one.

It's an interesting move by the commissioner. In the short term we should see diverse offerings from other ISPs far more quickly than we would under full unbundling. In the long term the commissioner is leaving the floor clear for those non-Telecom network companies, like BCL, Counties Power and Woosh, to build competing networks. I fully expect to hear plenty of grumbling about all of this in the next few months, but I equally expect the various parties to get on with it and offer us new services. How quickly that happens will depend, as ever, on Telecom's willingness to negotiate. Without that, we're back to the commissioner for another round of "set the price" and I think we could all do without that. Merry Christmas.

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

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