Chorus against changes widens

Business NZ, Vector and Federated Farmers are among a chorus of voices that have joined Telecom in objecting to the Commerce Commission's proposed changes to wholesale broadband rules.

The range of submissions from these organisations to the commission include concerns about broadband access in rural areas, product differentiation and investment incentives.

Three weeks ago, the commission issued a consultation document in response to a TelstraClear application for better wholesale terms. The key proposed terms would lower the wholesale rate Telecom charges TelstraClear to $26.57 a user and would remove the download speed throttles imposed by Telecom.

The commission invited commentary from interested parties and, over the past two days, made those submissions public.

In its submission, Telecom argued the lowering of the wholesale rate would cut its average revenue a user and thus make it uneconomic to invest in rural areas.

The company said the new rules could prevent up to 1200 customers who were slated to receive broadband from getting services and 5800 others would no longer be able to receive broadband.

Federated Farmers, along with Rural Women New Zealand and the Tourism Industry Association, urged the commission to consider more closely its proposals' effects on rural broadband.

Business NZ, of which Telecom is a member, argued the commission's terms would lead to less choice as the market moved to one high-speed offering.

"Everybody will have a limousine when some people might just want a taxi and may not want to pay for a limousine," said Business NZ chief executive Phil O'Reilly.

Vector, which wholesales broadband services on its fibre networks in Auckland and Wellington, agreed with Telecom that the rules would be a disincentive to network investment.

A number of parties made submissions welcoming the commission's determination. These included TelstraClear, CallPlus, ihug, MediaLab, InternetNZ and the Telecommunications Users Association. Most urged the commission to establish a mechanism to monitor network speeds.

The commission's final determination is expected by the end of the year.