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Benefits For Customers Yet To Be Seen

Benefits For Customers Yet To Be Seen

The test of today’s determination from the Commerce Commission will be whether customers actually benefit – and that is far from clear, Telecom said today.

“The wholesaling regime under the Telecommunications Act will take a long time to prove itself,” said Telecom’s Chief Operating Officer Simon Moutter.

“The Act encourages competitors to go to the regulator, but customers would be better off if companies sat down and negotiated these things commercially or, better still, competed with genuine infrastructure investment.

“We already wholesale dozens of products and have done for years – testament to the fact that negotiation can be successful.

“While the Commission has taken on board some of our suggestions to create a fair and workable wholesaling regime, there are still parts of this determination that seem very strange.

“The ruling on small businesses, for instance, could see us having to wholesale services to businesses in downtown Auckland where clearly there is already a fiercely competitive market.

“The 16% discount offered to TelstraClear to resell Telecom’s services is big by internationally standards where these agreements are negotiated. It ’s significantly higher than our actual avoided costs and could see Telecom making a loss on some services it has to provide under this determination,” Mr Moutter said.

“While the Commerce Commission has thrown out some of the services that were applied for we’re still dealing with the Act’s very intrusive regime – 98 regulated services compared with only one regulated service in Australia.

“There’s no evidence that over-regulation actually delivers for customers. We don’t want the overall regulatory regime, including the local loop unbundling review which is underway, to stifle investment in the way that has occurred in other New Zealand infrastructure sectors.

“We want customers to have lots of choice from competitors who are prepared to invest, not just resell services on our network,” Mr Moutter said

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