KEY POINTS:
Telecom's rivals are worried that local loop unbundling - the reason competitors called for more regulation - is being swamped by debate on how the telecommunications giant should be split up.
Several will raise the issue when they make submissions tomorrow on the split-up plan.
CallPlus chief financial officer Steven Rudd said deciding how to do the separation was complex and "quite big and ugly no matter which way you look at it".
But CallPlus was desperate to begin offering naked DSL services - giving broadband to customers without them having to pay Telecom for line rental - and using Telecom's network to deliver voice and data service as soon as it could.
The three-way separation of Telecom was a secondary priority.
"The most important thing for us is to get products into the market place," said Rudd.
It's a view shared by ihug. Chief executive Mark Rushworth said his company was pushing for local loop unbundling to happen this year. "While structural separation is important and has a place, we mustn't lose sight of local loop unbundling, because that's the only initiative that will ensure we drive competition in the broadband market."
Orcon's general manager of regulatory affairs, Scott Bartlett, also said the introduction of new services, including local loop unbundling and bitstream access, needed to be a priority in the separation process.
But he said for Telecom to deliver services to wholesale customers equivalent to those sold to its retail division and to also provide for local loop unbundling was a tall order.
Bartlett said the Government-imposed penalties Telecom would face for not implementing the separation would force it to direct its efforts in that direction.
"If the Commerce Commission slaps you around it ruins your afternoon, but it doesn't ruin your business case," said Bartlett.
"If the Government slaps you around, you really need to consider what the hell you're doing in that job."
Submissions on the Government plan to separate Telecom into three operational divisions are due tomorrow, and most telecommunications companies are expected to comment.
This month, Communications Minister David Cunliffe outlined details of the Government plan to create three separate units within Telecom.
It was the first stage in implementation of the Telecommunications Amendment Act passed in December.
Telecom gave a sneak peak of the likely content of its submission, releasing an outline of its response two weeks ago.
Telecom chairman Wayne Boyd said the Government plan was complex, unworkable and had no incentives for investment.
Instead Telecom proposed the creation of a separate network access group, provisionally named Netco.
Vodafone and TelstraClear said they were making submissions to the Government but would not comment on them.
One into three must go
* This month, the Government issued a draft proposal to split Telecom into wholesale, retail and network access units.
* Public comment was sought on the draft - tomorrow is the final day for submissions.
* Telecom gave an outline of its response, but a full report will be submitted tomorrow.
* A final Government proposal will be issued in June.
* Telecom will produce a draft plan on what it will do to implement the three-way break-up.
* The final separation plan will be accepted by the Government before the end of the year.
