Knowledge economy hamstrung by telco report

The draft report from the Telecommunications Inquiry makes for interesting reading, particularly if you've been keeping up with the spin the telcos have been putting on their own submissions.

The draft report from the Telecommunications Inquiry makes for interesting reading, particularly if you've been keeping up with the spin the telcos have been putting on their own submissions.

First the report itself - it's only an interim report, designed to narrow the field, and can be seen at:

The main push of the report is that the current light-handed regime (also known as the "look ma, no hands!" approach) isn't working.

It might be fine for the electricity industry, says the report, but for telecommunications in New Zealand in the year 2000, forget it. Lengthy legal arguments, wilful feet-dragging and the Kiwi Share agreement are all causing delays in the implementation of the knowledge economy and something has to be done.

Industrial strength solution

We'll have an industry-funded body - a forum - to look at everything. It will be made up of industry participants and have working parties to go over issues like interconnection agreements, number portability and so on.

I have one word for the Inquiry: Isocnz. Be afraid, be very afraid.

Industry groups, in my experience, tend not to work. They become bogged down in the minutia of everyday working life and are synonymous with the word committee. A place where ideas are lured and slowly strangled, I once heard and I couldn't agree more.

This will not achieve the lofty goal of industry "self-management" that the Inquiry sets and will be a source of many news stories in the years to come. Watch this space.

The other half of the solution, an Electronic Communications Commissioner, is more interesting.

A commissioner would, presumably, have deadlock-breaking powers and be able to look at a problem, like 0867, the slow rate of DSL roll-out or whatever, and say "make it so" and that would be the end of the argument.

The question must therefore be raised - will the commissioner have power or be nothing more than a toothless ombudsman, expected to solve all our ills whilst simultaneously being under-funded and having to rely on each telco's PR spin for information?

Hopefully it won't descend into a "came to drain the swamp but I'm up to my arse in crocodiles" kind of thing.

A commissioner is exactly what we need, even if it's only short-term until we get some real competition going, but we'll need one with power and the will to use it. Someone who is aware that the industry moves faster than anything else in New Zealand and that pondering for a year or so won't cut it.

Unbundling no option

Those are the solutions offered by the report - the biggest surprise for me was having the Inquiry say it would not be recommending local loop unbundling which everyone I've spoken with seemed to take as read. Instead the Inquiry will push for wholesaling - a poor cousin of unbundling.

Unbundling would allow other telcos direct access to the hardware that is the local loop to put in their own devices.

Wholesaling means Telecom will have to provide other telcos with cheap access to its copper lines - the local loop - and make available access to "its xDSL service" for reselling to customers.

This is a terrible thing. Firstly, it in no way imposes any sense of urgency on Telecom. Telecom already offers its DSL service to other ISPs to on-sell, but at such a price that they have yet to take it up on the offer.

Simply bringing the access price down does not mean Telecom will have to upgrade its exchanges - currently only 69 are DSL-enabled - to match demand. Telecom will still be in the driving seat when it comes to new-technology roll-outs. Nobody will be able to offer a service based on new technology unless Telecom also offers it and offers it first.

On top of that, the Inquiry has referred to xDSL rather than "any future technology" and that's a huge mistake.

Three years ago DSL wasn't even a player - Telecom was thinking about fibre-optic cable. What happens in three years' time when something new comes along and knocks DSL on its butt?

Will Telecom simply ditch the rest of the industry and move to the new technology because the Inquiry was too specific in its statements? Probably.

We can only be assured of competition in new technologies if Telecom is treated as an equal player with all the other telcos.

Making it the centrepiece of any future growth is nothing more than a delaying tactic and puts us back to square one again.

Sure, a commissioner could step in and say "Telecom, you must let the other kids play with this new ball" but how long will that take? And how much further behind will New Zealand slip while that debate rages?

Telecom wins over Inquiry

The Inquiry seems to have bought Telecom's view that unbundling is not cost-effective and that other technologies (fibre, wireless, LMDS) mean the local loop isn't as all-important as it used to be.

"The main reason for this is the pace of technological development ... which suggests that most of New Zealand's local loops [sic] may soon be replicable by other network providers," says the report.

It goes on to say that in three to five years around two thirds of New Zealanders will be have access to competition in the local loop market. It completely fails to realise just what an advantage having the local loop is to Telecom in the first place.

Nothing else is as cheap - it's already paid for - or as ubiquitous. Covering 66% of New Zealanders means covering the main centres and that's about it.

What about the rural users? What about the small towns? Are we to shut our farming community out of the knowledge economy at the very start?

The fact that the knowledge economy isn't mentioned until the very end of the report is telling.

This is an Inquiry that is looking only at the phone network and hasn't really come to terms with the concept that telecommunications is about data and about business in the e-world.

We're talking about moving petabytes of data around the Net and they're talking about the White Pages.

Paul Brislen is a Computerworld journalist. Send email to Paul Brislen. Letters for publication should be sent to Computerworld letters.

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