Actually, it's a lot like the wailing and gnashing of teeth that the Internet Society (ISOCNZ) went through with its domain registration system, except ISOCNZ got it right.
At the end of the week the commissioner will release his draft determination on unbundling the loop (ULL) and it's sure to cause trouble in all quarters. Last week the commissioner's office announced it was extending the definition of "local loop" beyond that written in law to include the whole network. The definition in the Telecommunications Act says the local loop consists of all lines between the home or office and the exchange. The commissioner has extended that brief to include everything, and that's surely an indication that he's going to call for some form of unbundling.
Unbundling is such an evocative word. It implies the freeing up of something, the removing of complexity and the unfurling of problems. In reality, it adds a layer of complexity, to put it mildly, and will provide many lawyers with retirement funds for the future.
ISOCNZ faced this exact problem: it had a natural monopoly that was making plenty of money but wasn't exactly loved by those that used it. It set up Domainz, a company, to run the register, the master list of domain names held by registrants. Registrars were companies that would contract to offer domain names to registrants; essentially they were resellers of the Domainz product. They couldn't set the price; they couldn't interface with the register directly. Generally speaking the only people that were happy were those running Domainz. The decision was made that ISOCNZ should fundamentally change this approach and it was the right decision to make. Domainz was something of a loose canon, competing with its customers while trying to deliver services to them. At one point I remember trying to wade my way through the domain name terminology only to discover Domainz had unilaterally decided to use the same terms as everyone else but for different roles.
Telecom also has a natural monopoly. The local loop is already built, it's already bought and paid for, it only needs maintaining. No other telco can compete with that; the cost of laying a similar network is prohibitive and quite unnecessary. Access to this existing network is what is needed.
ISOCNZ solved the problem by changing the fundamental relationship between registrar and register and moving to a shared registry system (SRS). Domainz was split in two, effectively, with one part left to run the register as a wholesaler and the competitive registrar side sold off. Any registrar was allowed to access the register once they'd agreed to the terms and conditions.
Registrants noticed the change immediately. Prices plummeted and there are more than two dozen registrars to chose from, each able to offer unique pricing and services built on the registry's basic wholesale rate.
The parallels are obvious, I hope; however, unbundling won't deliver the same results to the industry that moving to the SRS did for the domain name system. Telecom will remain both owner of the loop and competitor with its customers for use of that network. Any efficiencies that are delivered with one hand will be vigorously fought with the other, as Telecom showed after the commissioner reduced its interconnection rate to 1.13 cents per minute in his July draft determination. Telecom immediately doubled the charge for the remainder of the connection between toll boundaries.
Don't get me wrong - I support the move to unbundling. But to believe we will see the same level of efficiencies passed on to consumers that the SRS has brought is delusional. That is still going to take some time.