Calls to rethink Telecom privilege

By CHRIS BARTON

The commerce select committee heard vigorous calls yesterday from both Clear Communications and the Telecommunications Users Association (Tuanz) to reconsider local loop unbundling.

The committee was receiving oral submissions on the Telecommunications Bill due to pass into law in September.

Local loop unbundling - the removal of Telecom's monopoly on residential phone lines between homes and local exchanges - has been left out of the bill.

Tuanz chief executive Ernie Newman said allowing competing telcos to provide services on these lines was critical to achieving widespread broadband internet services.

"NZ is a long way behind in telecommunications regulation. Of the 26 countries in the OECD, only Greece, Turkey, Mexico, Hungary and NZ have yet to unbundle their local loops."

Mr Newman said the slow rollout of broadband access in NZ and its high cost showed the current system was not working. He pointed to evidence from Germany, which recently started unbundling and has considerable uptake of the fast internet services as well as significantly reduced costs to consumers.

New Zealand broadband charges starting at $70 per month were five times more expensive than Germany's equivalent at $14.

Clear Communications' manager of industry and regulatory affairs, Grant Forsyth, was concerned that if there was no mention of local loop unbundling in the bill, it would be at least another two years before it could be introduced and NZ would fall further behind the rest of the world.

In its written submissions, Clear said: "Broadband access and the driving of the knowledge economy are the key aims of this Government - but when will they be delivered without local loop unbundling?"

Committee chairman David Cunliffe asked both Clear and Tuanz "what would be a fallback position" if the designation of local loop unbundling "was too rich a fodder" to be considered by the committee.

Both suggested setting a date of about six months for when local loop unbundling would be mandated.

Submissions by Telecom and other carriers will be reported at a later date.