KEY POINTS:
Telecom's plan to increase broadband speeds by shortening the copper loops connecting homes to the internet has come under further scrutiny in a report released by internetNZ.
The non-profit group championing internet development in New Zealand commissioned an investigation into Telecom's investment in fibre networks due to a growing disquiet about the implications for competition.
InternetNZ executive director Keith Davidson said the organisation undertook a "fact finding mission" following the investment announcement late last year and the mixed response from the industry.
Many internet service providers saw the plan as undermining their own strategy to invest in local loop unbundling. Other internet companies saw the investment by Telecom as suiting their plans to remain reliant on broadband wholesaled from the telco giant.
InternetNZ was also concerned at a change in Communications Minister David Cunliffe's determination on the operational separation of Telecom that could mean up to 80 per cent of the wholesale division's chief executive bonus is linked to the company's overall performance.
This is a step away from the original determination which forbade remuneration in the wholesale division.
Report authors, Wellington consultancy Amos Aked Swift, said the potential for Telecom to control the market and marginalise the investment of new entrants had become evident with the release of more detail on the company's investment plans.
"A round of arguments on specific issues has commenced, with the new entrants claiming anti-competitive outcomes and the incumbent claiming legitimate commercial and engineering intent," wrote Amos Aked Swift.
It said it was "difficult or impossible to resolve" the detailed arguments put forward, but some areas stood out for further action:
* Ensuring competition when Telecom built new network infrastructure.
* A focus on measuring the long-term benefits for consumers of regulatory changes, including market share gained by new entrants and levels of investment in new services.
* Offering competitors access to copper lines Telecom is circumventing with its cabinetisation plans.
* Anti-competitive behaviour treated as having anti-competitive intent.
* Access to Telecom's copper network available on an equal basis to all competitors at the exchange, cabinet or other point in the network.
