Ihug is calling for the telecommunications commissioner to not simply unbundle the local loop but to go one step further and offer shared spectrum access.
While unbundling allows a new telco to simply lease the line itself from the incumbent (in New Zealand that's Telecom), shared spectrum allows the new player simply to lease part of the line and so offer broadband access while leaving the lower levels free for the incumbent to continue to offer voice.
Ihug's recent merger partner, Perth-based iiNet, is currently moving to a shared spectrum model in Australia, according to managing director Michael Malone.
"We're installing DSLAMs in the exchanges ourselves, but the line rental is vastly cheaper than it is with straight unbundling."
Malone says Telstra Australia charges $A40 per line per month for unbundling - a charge that doesn't include any switching gear or other technology that is used for the service.
"That only makes sense in the really dense areas, inner-city and that sort of place, where you want to offer a full service."
Instead, iiNet is leasing only the part of the spectrum that can offer DSL, or high-speed internet access.
"That costs us $A15 a month which is a much more viable option." Malone says iiNet can roll out those broadband services in more areas that way.
The Telecommunications Commissioner's office is investigating unbundling in the New Zealand environment. Commissioner Douglas Webb has already recommended unbundling in his draft report and is now reviewing submissions on that report in order to submit his final report to the government by the end of the year. One of the questions the commission is asking is whether New Zealand should also institute a similar scheme in this market.
Ihug managing director Martin Wylie says at this point he'd take whatever the commission can offer.
"At the moment we're really just trying to get anything agreed on in principle. Then we're able to plan ahead."
Wylie says it could take several years to get an unbundled market to the point of seeing an impact on end user prices so the faster we get started the sooner that will happen.
"You need the full access however, otherwise all you're doing is simply selling Telecom's service under a different name. We want to be able to go into the exchanges, put our own equipment in and sell our own services."
Wylie says this isn't a case of "picking the eyes" out of Telecom's market but simply being able to offer a better, more efficient service.
"We wouldn't do it if we didn't think we could be more efficient."
Telecom is opposed to unbundling in any form, saying it will inhibit growth of new technologies and new network infrastructure. Telecom's submission to the commissioner on the matter says unbundling has not been proven to work anywhere in the world.