Unbundled sun shines on offices

Smaller players providing video-on-demand and internet telephony services will change the market's competitive mix completely, says Colin Jackson. Picture / Mark Mitchell

It's a glorious afternoon in Wellington's retro-looking inner city but it isn't just the winter sun brightening Internet NZ's minimalist offices.

It's the day after Communications Minister David Cunliffe's abrupt announcement of local loop unbundling, the ultimate dismantling of Telecom's monopoly on phone and internet services, and the internet society's president Colin Jackson can hardly contain his excitement.

That's because the sweeping regulation outlined by Cunliffe includes just about everything Internet NZ recommended in a February report submitted to the minister.

The only suggestion missing from the final regulatory mix was the structural separation of Telecom into network and operating arms.

"Significantly, they've kept that around so they can use it as a threat to control Telecom's behaviour," Jackson points out.

For the small organisation that oversees the New Zealand domain name register and lobbies for better internet services, the unbundling provisions are a major coup.

"I think it's a big turning point for New Zealand," says Jackson, who stands in the middle of a large 10th-floor room that is soon to be fitted out with computers connected to a high-speed network that will be available for businesses to use.

Just shy of a year in the job as president of Internet NZ, Jackson was a founding member of the body, its first treasurer and served on the council for years while his day job saw him work on internet policy for the Government and later in the E-Government Unit.

Now he oversees an organisation that is increasingly taking on a consumer advocacy role similar to the Telecommunications Users Association.

Both organisations see the significance of a provision that Telecom's competitors gain access to "naked DSL". That removes the need to pay Telecom the $42 a month line rental charge just to receive internet services. Telecom's local calling revenues, the mainstay of its business, are at greater threat than ever before in the company's history.

But it's about more than faster internet and being able to rent a phone line from Telecom's competitors.

"We're going to get a lot more than that. They're removing the restrictions on providing real-time services."

That means smaller players such as ihug or Slingshot could enter the market with video-on-demand and internet telephony services, changing the competitive mix in the market completely.

The ability of competitors to put their equipment in Telecom's phone exchanges would also cut congestion on its network at key exchanges.

"There are issues with contention ratios. Now the other operators will be able to do something about that."

Jackson applauds the Government's commitment to revisiting the rural broadband issue and rejects Telecom's arguments that competitors getting into unbundling will "cherry-pick" easy-to-reach customers in well-served urban centres.

"Cherry-picking is such a loaded term. Yes, it will happen, but it's perfectly rational corporate behaviour and it's a bit rich for Telecom to argue with that. You can't have it both ways," says Jackson, who seems to have little sympathy for Telecom and the impact on its business.

"If you read the Cabinet papers, it shows that Telecom hasn't invested in the next generation network as fast as they said they would," he counters.

He also refuses to accept the main pillar of Telecom's argument that it will invest less in providing next generation internet services because its network has been opened up.

"I don't buy it. It's not what you find overseas. Incumbents have invested more to stay ahead of the competition."

The unbundling bonanza has for the moment overshadowed more-mundane but nevertheless important business on Internet NZ's agenda. There's the bedding-in of a disputes resolution process for internet domain name disagreements.

"That's the final piece of policy in running the .nz domains," Jackson says.

"We get complaints but we don't intervene. Currently people sue each other. This process will make it easier for people to make complaints and to defend themselves."

An eight-person panel, including three former High Court judges, will settle disputes.

In March, Internet NZ hosted in the capital a meeting of the Internet Corporation for Assigned Names and Numbers (Icann), the body in charge of the global internet domain name system.

"We felt we showed off New Zealand to a lot of people," says Jackson, who describes Internet NZ as "a small bunch of geeks trying to change the world".

For now, he says, it's up to the Government to ensure the provisions it has laid out are acted upon.

"The Government's got the bit between its teeth.

COLIN JACKSON

Next big thing in tech: "I'm with [internet co-founder] Vint Cerf who says that 99 per cent of the applications haven't even been invented yet."
Favourite gadget: A toss-up between his Apple Power Book, iPod and Palm Treo.
Alternative career: Back in Government working on internet policy.
Spare time: Likes relaxing with his family and reading.
Favourite sci-fi movie: Blade Runner. "Philip K. Dick's stuff is amazing. Minority Report is great too."