Broadband needs unbundling says Intug

There is little hope of "broader band" -- 128kbit/s to 512kbit/s -- evolving to become widespread true broadband in New Zealand when there is one kind of DSL, carrying a Telecom brand name.

There is little hope of “broader band” -- 128kbit/s to 512kbit/s -- evolving to become widespread true broadband in New Zealand when there is one kind of DSL, carrying a Telecom brand name.

So says International Telecommunications Users’ Group executive director Ewan Sutherland.

Reselling of JetStream offerings without even changing the name is not real competition. The answer, he says, lies in unbundling the local loop (LLU). This would give raw capacity to the new entrants.

The risk to Telecom is the loss of 20% to 40% market share at the retail end, but this, he says, would be amply compensated by the revenue from the sale of the local loop.

The user will win from new and imaginative services, and from pressure on Telecom to lower prices. Telecom has insisted that such pressure will handicap its ability to invest in new technology, but its willingness to lower prices in areas like Wellington and Christchurch, where it has met real competition, belie this, Sutherland says.

In his international work for Intug he has seen broadband take off in the US and Europe, but the field is still bedevilled by politics and legal action. The European Community has imposed a similar regulatory environment on all its member states, but prices to the user still vary over a huge range. Competitors can exist with widely different pricing in different areas within the same country, but repeatedly it has been shown that as soon as competition on the same territory threatens, tariffs come down and bandwidth magically doubles.

Even with the mandating of LLU, in many countries, “creativity is still resisted”, especially by the incumbent telcos.

He suggests, half-seriously, that one of the reasons Japan leads the surge to broadband is that it is the country with the fewest lawyers per thousand people.

Sutherland is not optimistic for wireless as an alternative competitive infrastructure obviating the need for LLU.

“You have to ask whether the wireless companies are sustainable [in the long term], and whether they’re going to offer services to the whole country.”

If there a wireless company with a huge international market announces it is coming to New Zealand, the picture may look more positive, he says.

Graeme Osobrne, new chair of Tuanz, giving a preamble to Sutherland’s address, was even more sceptical of new wireless infrastructures emerging. “They’re not yet proven in real life; often they’re implemented nowhere else in the world,” he says.

“New networks take a long time to roll out [nationwide] and then you have the logistical nightmares of billing and maintenance.”

The Telecom copper network is a “bird in the hand”, he says.

Sutherland showed us, as though we weren’t already familiar with the discouraging picture, New Zealand’s ranking by number of broadband and near-broadband connections compared to other nations, mostly from the OECD. We should, he suggested, be feeling as depressed and fired up to do something, as if the All Blacks were 21st in the world league.

Asked about uses for broadband, Sutherland showed himself to be rather of the “build it and they will come” school. “What makes the difference [to the residential user] is that it’s fast, always on, flat-rate and doesn’t interrupt the phone line.” Other uses from there were a matter of the imagination of users and “content” providers. He spoke glowingly of the ability to listen to FM radio from Bangkok in Canada and to use an $18,000 high-definition television set as it was supposed to be used; not the fuzzy reception he’d apparently seen in Auckland.

Aided by fear-inspiring phenomena like terrorism and SARS, broadband is also promoting multi-country co-operative teleworking. “Travel has diminished and it doesn’t look like picking up again.”

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