Telecommunications report panned before release

As the report of the inquiry into telecommunications goes public a fibre-optic cable proponent is already pointing to deficiencies in the inquiry team's thinking.

As the report of the inquiry into telecommunications goes public a fibre-optic cable proponent is already pointing to deficiencies in the inquiry team’s thinking.

According to Superway founder Bill Whittom, unbundling the local loop should have been an inquiry priority. But the draft inquiry report, which was released in June, said an immediate unbundling recommendation was unlikely. The inquiry's final report will be released on Wednesday.

“The local loop will be the cheapest, most efficient way of moving data around for years to come,” says Whittom. Superway is building a fibre network on Auckland’s North Shore.

Telecommunications Users Association (TUANZ) chief executive Ernie Newman is another unbundling advocate.

“It should be unbundled straight away. There’s all the evidence in the world, literally, that it’s the best way to induce competition without wasteful duplication.” Newman says telecomms legislation should be as “technology neutral” as possible so as to eliminate issues such as the Kiwi Share requirement, which dogs existing law, and which didn’t take account of growth in data traffic when it was drawn up.

Newman doesn't accept the minister for telecommunications’ assertion that the local loop is being supplanted by new technologies like wireless and fibre.

“The traditional argument against unbundling is self-defeating. If that is going to happen the cost to the incumbent of unbundling is greatly reduced because the value of the local loop itself is diminished.”

He acknowledges there are problems associated with unbundling — Telecom is the sole owner of that loop — but they can be surmounted as they have been overseas.

“I think it’s fair to say that if we were privatising Telecom today we would be unlikely to let it have ownership of the local loop.”

Newman hopes the final report will be stronger in one particular area — that of a national broadband rollout.

“In the draft all Telecom has to do is issue a statement saying how fast it’s rolling out DSL but it leaves the future of broadband in New Zealand entirely in the hands of one company.”

Newman believes Telecom would focus its attentions on the profitable end of the market, where it has no competition, and leave smaller towns and rural users out in the cold.

“Where are they going to place their scarce investment dollars? It sure isn’t going to be putting broadband into Wairoa Primary.”

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