ComCom to investigate alleged Telecom Separation breach

Commission will look into possible breach of Separation Undertakings

The Commerce Commission announced today it has launched an investigation into an alleged breach of Separation Undertakings by Telecom.

A statement from the Commission reads: "The investigation will assess whether Telecom Wholesale is likely to have discriminated against telecommunications providers in favour of Telecom Retail. The Commission’s concerns arise from the price at which Telecom Wholesale offered the unbundled bitstream access (UBA) service to telecommunications providers who intended to take up the sub-loop extension service (SLES) from Chorus, compared with the price Telecom Wholesale charged to Telecom Retail.

"The sub-loop extension service (SLES) is a commercial service provided by Chorus to enable service provider to supply an exchange-based voice service in conjunction with a cabinet-based UBA broadband service."

In the statement, Telecommunications Commissioner Dr Ross Patterson is quoted as saying: “Earlier this year concerns were raised with the Commission about the price Telecom requested for the UBA service to be supplied in conjunction with SLES. “At the time the Commission advised Telecom of its concerns that Telecom Wholesale’s offer was discriminatory. Telecom responded that it did not believe that Telecom Wholesale was in any way in breach of its non-discrimination obligations.”

The investigation follows the completion yesterday of a clarification process into the provision of UBA in conjunction with SLES.

The Commission will now gather information to assist its investigation and expects to complete the investigation by the end of March 2011. Orcon has chimed in with a statement appluading the Commission's move. "The Commerce Commission’s sub-loop extension service decision (released today) is a fantastic outcome," the statement, which is attributed to Orcon CEO Scott Bartlett, reads.

"It helps restore investment incentives and will lead to increased competition – which is vital for New Zealand’s broadband landscape until we see the ultra-fast broadband roll-out.

"The Commission recognises that Telecom has had the service for more than a year and we look forward to Telecom back-dating the credits to access seekers, and levelling the playing field.

"It’s a complex matter, but the Commission and industry have navigated their way through it to resolve this issue.

"What it means for Orcon, and for broadband users, is that we can continue to invest in building a network that provides true competition and differentiated service.

"Orcon believes the decision will result in a substantial reduction in the retail price of broadband and telephone packages and inevitably lead to better value for consumers. This is great news for Kiwi consumers."