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Rebutting Telecom Operational Separation Comments

InternetNZ Rebuts Telecom Comments on Operational Separation

Media Release
October 5

InternetNZ (The Internet Society of New Zealand) executive director Keith Davidson says he is disappointed that Telecom, through its chairman Wayne Boyd, is today continuing to claim that its operational separation proposals are aligned with and are better than the separation model implemented at British Telecom.

InternetNZ has previously detailed to the Select Committee considering separation issues, and to the media, the stark differences between Telecom's proposals and those of British Telecom.

Mr Boyd said today "We have proposed a form of operational separation which is based closely on that adopted by British Telecom in the UK."

Davidson says "We would expect Wayne Boyd as chairman of Telecom to be better informed and to address the differences directly. Following the actual British Telecom model will be key to ensuring healthy competition in the New Zealand broadband market."

“Telecom's operational separation plan is clearly inadequate because it does not include separation of the core network, where the 'enduring bottleneck' exists."

British Telecom's model creates a separation division called Openreach which has responsibility for the network assets, providing equality of access to all service providers including BT wholesale services group and retail operations.

Telecom's plan only provides “Equivalence of Inputs” for three services, while British Telecom has it for many more. “Equivalence of Inputs” means providing exactly the same services to wholesale customers as services supplied to one's own retail arm.

"Many ISPs have raised the issue of Xtra having favorable terms, and the recent Telecom retail pricing announcements have only highlighted the issues of Telecom treating its own ISP differently," says Davidson.

“Legislation for an operational separation plan is essential. There must be provision in the current bill giving the Government the power to implement a strong operational separation plan."

In its written submission to the Finance and Expenditure Committee InternetNZ provides a convenient mechanism for including this provision. The submission also includes in an Appendix a detailed breakdown of the differences between Telecom's proposal and British Telecom's approach.

The InternetNZ written submission is published on the InternetNZ website at
or direct at


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