The telecommunications commissioner had more bad news for Telecom this week when he announced his draft ruling on the wholesale rate for business services.
TelstraClear had asked the commission to review wholesale rates as part of its ongoing assault on Telecom under the new Telecommunications Act.
The commissioner, Douglas Webb, has indicated that he would like to see wholesale rates of 15% to 18% lower than Telecom's retail rates.
Telecom has responded by threatening to stop investing in the network infrastructure, while TelstraClear has said the wholesale rate is high compared with elsewhere in the world.
Telecom's operations chief, Simon Moutter, complains that the commission's ruling appears to "go much further than the regulatory regime in Australia and covers a far greater range of services", and warns that Telecom is considering its options with regard to ongoing investment in network infrastructure.
"Why would we continue to invest at our current high levels if the benefits are immediately siphoned off by our competitors?”
TelstraClear's chief executive, Rosemary Howard, says wholesaling is vitally important to the New Zealand telecommunications industry.
"Wholesaling benefits the economy, industry and end users by providing choice, competition and stimulating innovation and investment. To ensure these benefits can be fully realised, we’ll be giving reasons to the commission about why it’s important not to be overly conservative when setting the final terms," says Howard, who ran Telstra's wholesale division for several years before taking up the role as chief executive of the TelstraClear.
The Telecommunications Users Association (TUANZ) says the draft determination is "another major step in the interests of all New Zealand's telecommunications users".
"The commission has acted firmly in the interests of the public by including a wide range of services in its decision," says TUANZ chief executive Ernie Newman.
The commission's network access group manager, Osmond Borthwick, warns that this is only a draft determination and that the final ruling won't be available until early next year.
"It's important to bear in mind that this is an early stage in the process where the commission is presenting its preliminary views on various aspects. From here, the parties have the opportunity to make submissions and comment at a conference the commission plans to hold before the end of the year. Others with a material interest in the determination will also have the opportunity to participate in the conference."
The commission is also reviewing several other requests from TelstraClear and Telecom over similar issues in the residential market.