D-Day looms for unbundling

The government is expected to deliver telecomms users the gift of greater competition, when it receives the telecommunications commissioner's local loop unbundling report this week.

The government is expected to deliver telecomms users the gift of greater competition, when it receives the telecommunications commissioner’s local loop unbundling report this week.

Commissioner Douglas Webb says he is on track to deliver the report to Communications Minister Paul Swain on time.

“Yes, we fully expect to meet our deadline [of December 20] at this stage.”

A straw poll of the telco sector suggests most are expecting Webb to recommend unbundling, opening up Telecom’s last-mile network to competing service providers.

Telecommunications Users Association (TUANZ) chief executive Ernie Newman has already “ticked unbundling off the ‘to-do’ list”.

“I’d put my shirt on the final report being quite similar to the draft report.” The commissioner’s draft report, released in September, recommended unbundling.

Newman is also hopeful the government will accept the report’s findings and implement them.

“I’m 95% certain of that. I think there is widespread support across most of the political spectrum for it. I think Telecom has run out of friends with regards to unbundling and even some of the organisations that supported it initially are wavering in their support now.”

Telecom’s general manager for government relations, Bruce Parkes, has a somewhat different view, however.

“I think the commissioner will come out strongly against unbundling in any form on the basis that only one carrier appeared at the conference in support of unbundling and that was TelstraClear.”

However, the head of Wellington-based metro ethernet provider CityLink, Neil de Wit, is positive the commissioner will opt for unbundling.

“The whole globe has gone in this direction, so if you were to have a bet on it you’d have to say they’d go this way.”

Counties Power, the Auckland based electricity company that is building its own fibre network south of the city, also believes the recommendation will be for unbundling.

Chief executive Neil Simmonds says Counties Power tried to assess whether unbundling would be good or bad for the provider, and decided at the end of the day it didn’t matter.

“If they unbundle then we can use the network ourselves and offer service that way. If they don’t then we have our own network infrastructure.”

TelstraClear’s government affairs manager Grant Forsyth says strong evidence is emerging that unbundling does drive broadband uptake around the world.

“Unbundling isn’t a silver bullet, but we must have it to really enable competition. There’s empirical evidence from the ITU and OECD that unbundling does help free up a market and introduce competition.”

Auckland-based ISP ICONZ also expects the commissioner to recommend unbundling and for the government to implement it.

“There is a perception that unbundling will be good for the market in general, that it will introduce change and the opportunity for growth and choice for consumers,” says general manager Sean Weekes.

The government’s response to the commissioner’s recommendation is due next year.

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