Other players will be able to wholesale Telecom's JetStream DSL service early next year, Telecom says, after a deal yesterday to "beta test" wholesaling exclusively with Clear raised eyebrows.
The DSL deal is part of a "relationship package" negotiated between between Telecom and Clear, which also includes new interconnection agreements and the dropping of outstanding litigation between the two companies.
But the wholesale deal on JetStream is controversial, because Ihug and possibly other parties have been asking for such an arrangement from Telecom for up to a year and received no firm response.
Like anyone else, Clear also has resale rights to JetStream, but the chief advantage of the wholesale right is the ability to supply its own international bandwidth behind the service. ISPs reselling JetStream must also buy Telecom international capacity, giving them little room to move on margin.
Clear will also provide its own customer premises equipment, but will not be permitted to install its own switches or routers in Telecom's exchanges, as would be the case under a full unbundling of Telecom's network.
Telecom spokesperson Linda Sanders says there is no intention to prevent Telecom and Clear's competitors from wholesaling JetStream.
"The key point is that we haven't built the network, so we have to get that up and running and testing it. And we do certainly hope that it will be available to other companies early next year. But we really do want to test it first and make sure it works properly, because we're going to get criticised if we put something out in the market and it doesn't."
She says billing is one of the issues that has to be ironed out.
Ihug director Nick Wood said yesterday that Ihug had been asking for wholesale access to JetStream for the past seven months - and had been told by Telecom that Telecom had yet to make a decision on whether such access would be made available.
"I'm not aware of what their requests have been to us," says Sanders. "But having said that we will be endeavouring to get it out to other players as soon as we can."
The JetStream agreements solves the problem of a broadband strategy for Clear, which has not participated in the current radio spectrum auction and has up till now been relying on a high-speed service delivered via the public 2.4GHz spread spectrum band, which has already reached its capacity in parts of Auckland such as Penrose.
Clear spokesperson Ross Inglis also denies there is anything anti-competitive about the agreement with Telecom.
"We've been the most forthright advocates of a more competitive environment, so that wouldn't reflect our viewpoint at all."