Internet faster, cheaper by Xmas

Faster and cheaper broadband internet access is finally on its way and consumers could benefit by Christmas.

The Commerce Commission yesterday cleared the way for increased competition among internet service providers by siding with many aspects of a TelstraClear application for access to Telecom's network.

The commission ruled that Telecom will be required to offer wholesale internet access to resellers at the maximum speeds its equipment is capable of delivering, rather than continue to impose its own limits.

Using current technology, resellers will now be able to offer download speeds of up to 7.6 megabits a second - more than 130 times faster than dialup and 30 times faster than most basic broadband offerings. It is also about 3.5 times faster than Telecom's top residential speed.

The commission also ruled that Telecom had no basis to charge wholesale customers differently for business and residential access. It will now be required to charge TelstraClear (and other ISPs) a uniform rate of $26.57 per connection.

It said Telecom's "churn" fee (the amount the company charges competitors for poaching a customer) of $36.42 was too high.

It did not state what the churn fee would be, but said it would be considerably lower, possibly close to $8.

Both these rulings will ultimately lower the price for consumers, although the exact amount is difficult to determine now because of a lack of specific rates.

The Telecommunications Users Association hailed the announcement as a huge win for consumers.

With the speed throttles and pricing restrictions off, ISPs would be able to offer a wide variety of broadband services, said chief executive Ernie Newman.

Bruce Parkes, Telecom's regulatory affairs manager, said up to 72,000 customers could see their service affected.

The commission is accepting comments from interested parties until October 27. A final determination date has not been set but it is expected between late November and the end of the year.