Commerce Commission recommends Telecom opens local loop

3.00pm

The Commerce Commission has recommended Telecom open its local loop network to competitors, in a draft decision released today.

The local loop is the copper wire network that links homes and businesses to a national telephone network, and analysts say opening it could mean cheaper access to broadband internet.

The competition watchdog said it considered there would be substantial net benefits from unbundling Telecom's local loop network.

"Unbundling of telecommunications networks is a means of allowing competitors to use parts of the network on a wholesale basis, in order to build up a competitive offering of retail services," Telecommunications Commissioner Douglas Webb said giving the commission's preliminary view.

"Through obtaining access to Telecom's copper wire network, other carriers will be able to compete more vigorously with Telecom in the delivery of broadband and voice services both to residential and business users."

The decision amounts to a breakthrough for Telecom's main competitor, TelstraClear.

"While the overseas experience has not been conclusive, the commission's cost-benefit analysis shows substantial net benefits from unbundling. The commission would, however, welcome input and comments to refine this analysis further," Mr Webb said.

The commission is seeking submissions and will hold a public conference in October in preparation for its final recommendation to the Minister of Communications in December.

- NZPA