Commissioner extends scope of unbundling inquiry

The Telecommunications Users Association (TUANZ) is applauding the Telecommunications Commissioner's decision to extend his inquiry into unbundling the local loop.

The Telecommunications Users Association (TUANZ) is applauding the Telecommunications Commissioner's decision to extend his inquiry into unbundling the local loop.

The commissioner is currently reviewing the options available for unbundling in New Zealand. New Zealand is one of only a handful of developed nations that has not unbundled the copper network and the commissioner is required by law to review the decision before the end of this year.

The commissioner's office has released an issues paper on unbundling, has been conducting a public hearing into the matter and has concluded that the inquiry should be extended into several other areas as well. These include:

  • the Main Distribution Frame;
  • ancillary Services which may need to accompany unbundling of the local loop network or the fixed public data network;
  • co-location;
  • backhaul;
  • line sharing; and
  • data backhaul over the public data network.
TUANZ chief executive Ernie Newman welcomes the decision, saying it will be good for end users.

"Local loop unbundling has proven internationally to be a crucial, but complex element of a competitive telecommunications market,” says Newman.

The commission has until September 18 to produce its draft report. A final report will be handed to government before the end of the year. The Telecommunications Act does not require the government to accept the report's findings or to act on them in any way.

Telecom has been opposed to unbundling in New Zealand, saying it is an outdated concept that hasn't worked anywhere in the developed world. Unbundling would allow telcos other than Telecom direct access to the local loop to install their own equipment and offer their own services. Telecom would receive a wholesale payment for the use of the loop but would not be able to control the services offered by these unbundled companies.

TelstraClear has vigorously supported unbundling in New Zealand and chief executive Rosemary Howard has repeatedly stated the company would prefer to buy network capacity than build a duplicate network.

Newman says unbundling is vitally important to the reduction of prices and the introduction of new services in New Zealand.

“Here in New Zealand the obvious determination of Telecom to frustrate the process at every tortuous legal, political and commercial step makes it imperative that the commission’s investigation, and any resultant regulation and implementation, are robust and complete."

He says although any further delay is concerning, TUANZ supports the commission in seeking "a modern, high quality outcome in the interests of our economic development."

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