Unbundling No Quick Fix

Unbundling No Quick Fix

17 September 2006

An independent report confirms that unbundling the local loop will not automatically lead to better telecommunications services for rural areas, and government intervention is required, said Hugh Ritchie of Federated Farmers of New Zealand.

The intervention should be part of a revised Telecommunications Service Obligation which will encourage greater access to services, with the ultimate aim of moving towards a broader Universal Service Obligation, Mr Ritchie said.

As part of a submission on the government’s unbundling lawchange, Federated Farmers asked an independent researcher to study the impact of unbundling on rural communities overseas. The research by Amos Aked Swift (NZ) Ltd looked at case studies in Britain, the U.S., Australia, Canada and France, and recommended:
1. The TSO should be revised
2. The government must show leadership in achieving the new telecommunications environment.
3. The government must commit to a timeframe for putting in place standards and regulations necessary to encourage new providers into the telecommunications market.
4. New Zealand should set up an equivalent to the ‘Connect Australia’ scheme.

“Overseas experience has shown that unbundling the local loop has not in itself addressed the needs of remote and rural users. There are lessons in these examples that New Zealand must learn,” Mr Ritchie said.

“Rural areas are already disadvantaged in their ability to access reliable and fast telecommunications services. The Federation is concerned that the government’s rush to improve the quality of broadband services in New Zealand is likely to lead to a widening gulf between the urban ‘haves’ and the rural ‘have nots’.

The Telecommunications Amendment Bill will unbundle the local loop and open up wholesale broadband to Telecom’s competitors. As such, the Bill represents a major shift in the regulation of the telecommunications industry and the delivery of services to telecommunications users, Mr Ritchie said.

“The shift to unbundling will seriously impact the provisions of services to rural New Zealand yet those impacts are not addressed in this Bill,” Mr Ritchie said.

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