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Determination for sub-loop services

Commerce Commission issues draft standard terms determination for sub-loop services

The Commerce Commission has today released its draft standard terms determination on the price and non-price terms on which Telecom must make the regulated sub-loop services available to other telecommunications providers. These are the services required to allow companies to provide services to their customers from Telecom's roadside cabinets.

The sub-loop is the copper telephone wire that runs from a Telecom roadside distribution cabinet to an end-user's premises. The sub-loop services will allow other telecommunications providers to locate equipment in Telecom's distribution cabinets, use Telecom's copper network to deliver services to their own customers, and to access fibre transmission capacity from Telecom's distribution cabinets back to local exchange buildings.

The Commission's determination amounts to a complete commercial agreement, which will allow competitors to take the services from Telecom without the need for any separate agreements.

"This draft determination is the last in the current series of determinations to improve competition in broadband telecommunications markets," said Telecommunications Commissioner Dr Ross Patterson.

"Sub-loop unbundling will allow Telecom's competitors to offer high-speed cabinet-based services by taking advantage of the shorter copper loops that result from the cabinetisation process. This will help facilitate the deployment of broadband technologies which are capable of delivering speeds in excess of 20 Mbps."

To address capacity constraints associated with distribution cabinets, the Commission's preliminary approach has been to develop a comprehensive set of space allocation rules to ensure that parties are allocated space in an equitable manner. These rules are designed to prevent lack of cabinet space becoming a major barrier to competition in the telecommunications industry.

The draft determination sets out the Commission's preliminary view that monthly rental charges for access to the unbundled sub-loop service should be set at $11.99 per line for urban areas and $22.14 per line for non-urban areas. The monthly rental for the sub-loop backhaul service is $281, where dual-fibre transmission capacity is used, or $142 for single fibre transmission capacity.

The monthly rental charge for co-location of equipment in a distribution cabinet is calculated on a case by case basis depending on the space occupied in the relevant distribution cabinet.

It is important to note that this is a draft determination. The industry has been asked to provide more information on a number of issues and there will be a period of further consultation before a final determination is issued.

The closing date for submissions on the draft standard terms determination is Wednesday 15 October 2008. This will be followed by a period of cross-submissions and a conference in early December.

After consultation on the draft determination, a final determination will be made by the Commission. It is anticipated that the final determination will be issued in January 2009.

The Commission's draft determination and related documents can be found on its website www.comcom.govt.nz under IndustryRegulation/Telecommunications/Standard Terms Determinations/SubloopUCLLservice/

Background

The sub-loop network refers to Telecom's copper network as it relates to the connection of local loops between the end-user's building and a distribution cabinet. This standard terms determination is for the following designated access services as they relate to the sub-loop network:

 Telecom's unbundled copper local loop network service (Sub-loop UCLL Service);  Telecom's unbundled copper local loop network co-location service (Sub-loop Co-location Service); and  Telecom's unbundled copper local loop network backhaul (distribution cabinet to telephone exchange) service (Sub-loop Backhaul Service),

The Sub-loop UCLL Service provides access to the copper loops between Telecom's distribution cabinets and end-users' premises. Access to the Sub-loop UCLL Service allows other operators to provide voice and broadband services to their customers using Telecom's copper pairs.

The Sub-loop Co-location Service enables access to Telecom's distribution cabinets (or equivalent facilities) for installation of equipment, such as Digital Subscriber Line Access Multiplexers (DSLAMs), used to provide telecommunications services over copper loops.

The Sub-loop Backhaul Service provides transmission capacity in Telecom's network between the distribution cabinet and the local telephone exchange.

On 22 December 2006, the Telecommunications Act 2001 was amended to incorporate a process for the Commission to make a standard terms determination on which a designated access service or specified service must be supplied by an access provider to any access seekers requesting the service. A standard terms determination will include:

 non-price terms set by the Commission after considering the access provider's standard terms proposal; and  price terms for access to the service, set by the Commission.

It is intended that a standard terms determination should be comprehensive enough and contain sufficient detail so that there is no need for an access seeker and access provider to enter into a separate agreement for provision of the service within the specified timeframe.

The Act specifies that the following steps must take place before a standard terms determination may be made by the Commission:

- Initiation of the determination process

- At least one scoping workshop

- Commission issues notice to an access provider requesting a standard terms proposal

- Access provider submits a standard terms proposal

- Submissions on the standard terms proposal

- Commission issues draft standard terms determination

- Submissions on the draft standard terms determination

- Commission issues standard terms determination

A brief overview of the key steps in a standard terms determination process is available on the Commission's web site www.comcom.govt.nz under Industry Regulation/ Telecommunications/ Standard Terms Determinations/ Overview

ENDS

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