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Telecom Separation Model only goes halfway!

Press Release, InternetNZ,

6 September 2006

Telecom Separation Model only goes halfway!

Telecom today appeared before the Select Committee investigating the Telecommunications Act regulatory changes brought about after David Cunliffe's stocktake on the industry conducted earlier this year.

InternetNZ is very pleased that the Select Committee is focussing on Separation Options as the key issue for the future, however we are far from convinced that Telecom's proposed Separation Model offers any useful comparability to the British Telecom (BT) OpenReach Model.

One critical difference between the Openreach Model and Telecom's proposal is that the BT separation applies to their network infrastructure, while Telecom propose a split between wholesale and retail only, and only for a very limited number of products. Given that British Telecom only have 26% of the entire broadband retail market, whereas Telecom has around 80% of the NZ Broadband retail market, the need for a stronger model of separation in NZ must be the outcome.

"It is pleasing to see Telecom making moves towards a useful Separation Model, and obviously this is their opening bid in what is likely to be a negotiated process, but InternetNZ maintains that significant changes will be required if the end result is a truly competitive market in NZ" says InternetNZ Executive Director Keith Davidson.

ENDS

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