KEY POINTS:
The blogosphere is buzzing with debate and press releases are flying around on the subject of Telecom's plan unveiled yesterday to push fibre out to roadside cabinets in urban areas to shorten the lengths of cooper loops and improve broadband internet performance.
The plan for cabinetisation can be found here.
Rod Drury says the plan "looks duplicitous" and could backfire for Telecom.
TUANZ is up in arms. "How can Telecom now look its wholesale customers in the eye? It has encouraged them to invest in LLU in a group of exchanges, let them get several months down the track, then pulled the rug from under their business model," wrote TUANZ boss Ernie Newman.
There's certainly a feeling in the industry that Telecom hasn't been completely upfront with its competitors. But as Geekzone forum posters point out, the plans were signposted years ago - we all knew Telecom wanted to push fibre out to cabinets to improve broadband speeds and performance. I think the scope of the plan caught the ISPs who didn't expect it to come so soon and with such a strong focus on urban areas first.
Given the dissatisfaction with Telecom's network performance, you'd think that its fibre push would be a good thing - 2000 cabinets are to be upgraded with Telecom focusing on urban areas where the most people are.
The Wireless and Broadband Forum certainly sees it that way:
"We see this as mostly positive as it delivers New Zealand an infrastructure that it can finally claim will be on par with many of the mature markets internationally. We've always been a cheerleader for upgrades to any broadband system in New Zealand that lets Kiwi's climb the ladder for broadband viability," said Steve Simms, the forum's president.
Unfortunately the upgrade plan, which has actually been signposted for some time, tramples on the toes of Telecom's competitors like ihug, Orcon and CallPlus who want to take advantage of local loop unbundling provisions to put equipment in Telecom's phone exchanges and serve customers via the copper line network. Ihug and Orcon are already trialling LLU.
The cabinet plan improves Telecom's networks but leaves competitors out in the cold - at least until the Commerce Commission settles on provisions that would allow competitors access to those cabinets - or the right to build cabinets alongside Telecom's - so-called sub-loop unbundling. That could take a couple of years to nail down.
From the consumer's point of view, this whole cabinet upgrade is a double-edged sword - it might mean better broadband and some new services from Telecom in your area but without competitors able to use unbundling to get a leg-up in those key urban exchanges, there may not be the pressure on price and the new innovation you've been expecting from all this regulation.
What's the solution? Force Telecom to hold off its cabinet upgrade in some areas? That doesn't sound fair. Give competitors access to the cabinets once they've been upgraded - that'll probably happen but it will take time and hardly provide an incentive for Telecom to complete the work in a timely manner.
Either way, it looks like all of this is just going to force the ISPs to re-evaluate their unbundling plans, delaying the release of any competing services. Whether a purely cynical move by Telecom or an oversight on the behalf of its competitors, the result is the same - Telecom keeps the upper hand while everyone else hangs in limbo.
