Decision On Telecom Network Recommendations

Communications Minister Paul Swain today announced his decision on whether to open Telecom New Zealand's network infrastructure to competition.

"After detailed and careful consideration, I am now in a position to announce my response to the Telecommunications Commissioner's comprehensive report of last December.

The Commissioner made three key recommendations:in favour of "bitstream" unbundling to allow broadband (Internet-grade) competition on Telecom's wires at a level of 128Kbps upstream/256 Kbps downstream an offer by Telecom to provide unbundled partial private circuits (primarily used for business data services) be given six months to be implemented commercially. If there were no suitable outcome in that time, the merits of regulating the unbundling of such a service would be re-evaluated. against local loop unbundling (LLU) at this stage.

Mr Swain says his decision was a line call, made in what he believes are the best long-term interests of consumers.

"As Minister, I have three options. I can accept the recommendations of the statutorily independent Commissioner in full, reject them or refer them back for further consideration.

"After discussions with my Cabinet colleagues, advice from officials and submissions from industry, I have decided I will accept the Commissioner's recommendations and will move to implement bitstream unbundling by regulation.

"The government wants a greater broadband take-up by New Zealanders as rapidly as possible and in a more competitive environment. In my view, the decision I have reached presents the best opportunities to achieve that.

"If I had sent the recommendations back for further consideration, there was likely to be considerable delays to broadband competition, frustrating this government's goal of encouraging growth and innovation."

Mr Swain as Minister can only regulate a service following a recommendation of the Commissioner. This means that Mr Swain could not, for example, regulate full local loop unbundling (LLU) by Telecom, as the Commissioner did not recommend such regulation.

"The Telecommunications Commissioner decided while there were some benefits in opening Telecom's lines to telephone-call competition, the real gains were in improved access and competition for broadband.

"I understand that Telecom intends to exceed the recommendations for bitstream unbundling set by the Commissioner. The extent to which this is achieved will influence any future decision I may make on whether to refer these issues back to the Commissioner.

"The message to Telecom is that there is a chance to show good faith and truly pave the way for more competition.

"I recognise that my announcement today may not please everyone. However, on balance, I think this is the decision that has the potential to quickly promote more competition in the long term interests of consumers.

"I will be watching developments very closely and will be taking particular note at how quickly and successfully Telecom moves to promptly facilitate the delivery of higher-speed, more competitive broadband for New Zealand, " said Paul Swain.

ENDS

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