Peter Griffin: Ruling puts NZ out of the loop

COMMENT


The Commerce Commission's amazing about-face on fully unbundling Telecom's local loop is a huge setback to encouraging broadband competition.

If the commission was interested in helping consumers and in seeing more households and businesses hooked up to better broadband, it would have gone with its more progressive draft plan, rather than the watered-down final version with which it stunned the market last week.

Here was an opportunity to learn from unbundling debacles overseas; to punish Telecom for its poor effort in pushing high-speed internet services; to reward TelstraClear for spending over $1 billion on its network; and to give Kiwis the ability to give all their communications business to someone other than Telecom.

Sure, the commission's alternative plan allows TelstraClear, ihug, CallPlus and others to muscle in on Telecom's bitstream and to go head-to-head with its DSL high-speed internet services.

But unbundling and bitstream together would have given newcomers the ability to deliver the triple play of telecommunications - voice, data and video - using an existing access network but adding their own intelligence.

It is hard to understand why the commission didn't continue with its full unbundling proposal, with a few caveats thrown in to ensure TelstraClear couldn't go to every exchange in the country and demand to be let in, at Telecom's expense.

That would have allowed TelstraClear to become a real broadband competitor from day one while the business case for using unbundled loops to deliver that triple-play of services could have been built up over time.

Telstra could have copied the way Telecom gradually rolled out its Jetstream service, with at least 30 people connected to an exchange having to sign up before it installed the necessary equipment.

With just a few exchanges unbundled in Greater Auckland alone, TelstraClear would be able to reach hundreds of thousands of customers with a whole new set of services.

Throw in number portability and we'd be set.

Maybe the straight-talking telecoms analyst Paul Budde is right and the commission is bowing to political forces that don't want Telstra to get too powerful here.

Whatever its reasons, the commission has now forced us to put our faith in a band of fledgling wireless broadband players for competition in internet access and voice calling.

Let's hope they deliver.