Commerce Commission rejects Telecom broadband speed plan

David Diprose

The Commerce Commission dealt Telecom another blow yesterday - this time rejecting its management strategy for increasing broadband speed to wholesale customers.

In July Telecom presented the commission with a draft management plan on broadband network speeds.

The plan was in response to a ruling by the commission that Telecom must supply a high-speed bitstream broadband service to wholesale customers ihug and CallPlus.

But a report released by the Commerce Commission yesterday said Telecom's spectrum management plan had no substance.

This is the first time that Telecom had proposed limiting transmission power on its network and had not produced any evidence to back up its strategy, according to the report.

"The conclusions drawn regarding the potential impact of unconstrained ADSL services ... appear to be tenuous at best," the report said.

"The enforced reduction in transmission power has not yet been justified in any manner."

Critics of the plan had argued that cutting power on the network would slow down available broadband speeds.

Back in July the commission also ruled that Telecom must offer unconstrained speeds - faster than its current 2 megabits per second and 3.5 megabits per second services.

This is part of the Government's plans to see Telecom open its network to competitors - called local loop unbundling.

But a plan needed to be in place before unconstrained services are launched, Telecom argued.

It needed to reduce power on its short copper loops in the city network to avoid degradation of services as more users came on to the network.

The company believed that by bringing down the power, interference between telephone and the different internet services would be significantly reduced.

Telecom said if the plan did not go ahead, about 46 per cent of all lines would not achieve the 2 megabits per second and 3.5 megabits per second rates if unconstrained broadband services were launched nationally.

Ihug regulatory manager David Diprose was pleased at the Commerce Commission's findings.

"The commission's results show that there is no substance to Telecom's claims at all," said Diprose.

If Telecom reduced power on its city network it would slow broadband speed to customers in the central business district and that was to be avoided at all cost, Diprose said.

Meanwhile, the Commerce Commission also released a report yesterday recommending a two-year extension of regulation for interconnection, retail resale, national roaming, number portability, and co-location of mobile sites.

The extension was necessary to promote competition in the telecommunications market, the commission said.