Telecom told to give CallPlus and ihug greater internet access

Telecom has been told to provide the bitstream access within a 18 weeks.

Telecom has been told to allow internet service providers ihug and CallPlus regulated bitstream access to its network, enabling them to provide higher speed broadband.

The Commerce Commission today released a final determination providing ihug and CallPlus with regulated access to a wholesale bitstream service from Telecom.

Bitstream was a form of transmission capacity on Telecom's copper local access network, the commission said.

CallPlus and ihug would be able to combine it with their national and international transmission capability and ISP services to support their retail broadband services.

They would be able to expand their retail service offerings by providing higher speed broadband. The result would be more choice and greater competition in the broadband market.

The commission decision closely followed a similar decision late last year that allowed TelstraClear the right to obtain a regulated bitstream access service.

Telecom was required to provide nationwide bitstream access to ihug and CallPlus with the maximum downstream speed technically available and an upstream speed of 128kbps, at a GST-exclusive price of $28.04 per month, the commission said.

The wholesale price for bitstream access was not to distinguish between customer type or speed.

The commission had concluded that a uniform wholesale price would not remove incentives for ongoing diversity in retail broadband services available at different prices.

Telecom was to provide the bitstream access within 18 weeks.

CallPlus and ihug applied to the commission for the determination in March.

Today's decision was yet another blow to Telecom, already hammered on the sharemarket following the Government's announcement early last month of a more heavy handed regulatory environment.

Before the announcement Telcom's shares were at $5.75. Yesterday they hit a 13-year low of $4.06, meaning $3.3 billion has been wiped off Telecom's value in six weeks.

- NZPA