Clear casts vote for competition through access

By RICHARD BRADDELL

WELLINGTON - Clear Communications has cast its vote in the lead-up to the election, arguing that Telecom's local network should be opened up for use by competitors.

"The monopoly lines company - in New Zealand's case, Telecom - must allow all telephone companies to use its lines to provide services to customers. The monopoly cannot use its lines to limit competition," Clear said in a flyer distributed in metropolitan newspapers today.

The call comes a day after the New Zealand regulatory environment was heavily criticised by an Australian telecommunications commentator, Paul Budde, who highlighted the need to unbundle Telecom's local loop as a prerequisite to enabling competition to flourish and promote the so-called knowledge economy.

Mr Budde said the New Zealand market had "deteriorated" in growth terms compared with other markets, with total market revenue growing only 1 per cent, against 10 per cent in Australia.

He did not detail the extent to which price falls had contributed to sluggish revenue growth. However, he said the lack of a pro-competition government policy had resulted in negative growth for Clear, which was starting to concentrate on the business rather than residential market.

In response, Telecom strenuously rejected points made by Mr Budde, noting the impact of intense competition on prices and revenue and that international giants like British Telecom and Vodafone had invested heavily in New Zealand.

Mr Budde said companies such as Wellington residential operator Saturn had to be nurtured.

Saturn Communications' chief executive, Jack Matthews, said while Saturn was naturally against unbundling of local loops, Telecom had two choices. The first was to encourage the development of alternative infrastructures, with the result that new high-capacity broadband networks would force the incumbent into upgrading its own networks.

While that implied economic inefficiency because of the duplication involved, Mr Matthews said the alternative would require "armies of accountants" to man regulatory structures such as Britain's Oftel that would be needed to establish appropriate pricing structures.