Telco tough talk wins cautious welcome

Telecom is playing down Labour's tough-talking internet wholesaling policy while other market players are trumpeting it as a possible saviour.

Telecom spokesman John Goulter said yesterday that the Government's policy was not anything new.

"It essentially just restates what has been their policy for quite some time," he said.

Communications Minister David Cunliffe yesterday released a policy paper that called for cheaper and faster internet access through a crackdown on Telecom's wholesale business.

He said if Labour was re-elected and Telecom did not meet its customer goals for 2005, he would start a review that would bring wholesale regulation in line with recent developments in Australia, the UK and the European Union.

These have ranged from erecting Chinese walls between the incumbent's retail and wholesale business, to complete separation, to allowing competitors access to the main provider's network.

Goulter said moving to regulatory regimes used in other parts of the world was not necessarily a good idea.

"In terms of specifics, I don't think you can point to Australia or UK or EU for best regulatory practice that is definitely the model that would have to be applied here," he said. "New Zealand would have to work out its best path in that area."

Telecom has agreed to sign up 250,000 broadband customers this year, with a third coming through wholesale channels.

The company said last month wholesale customers were only accounting for about 15 per cent.

Most observers say it is highly unlikely Telecom will meet the one-third goal.

Other market players are cautiously optimistic that the policy announcement will result in some real change.

"If they are actually going to pull through on that commitment, then we'll be thrilled.

"Our question has to be, have they really got the balls to do it?" asked Annette Presley, director of internet service provider Slingshot. "Have they got the stamina to fight the pressure that's going to come on if they really do try to put in place some form of segration or Chinese wall?

"If he can effect that, of course he'll have our complete support."

The Telecommunication Users Association also welcomed the announcement.

Chief executive Ernie Newman believes the policy is genuine and not just an election promise.

"I think there is a good chance that, towards the end of the year, when it becomes apparent that Telecom is nowhere near meeting its wholesale targets, that [Cunliffe] will start to take a much firmer approach than we've seen up until now."