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Unbundling Delays Cost Kiwis, claims ihug

Unbundling Delays Cost Kiwis, claims ihug

Kiwi ISP, ihug, says that Kiwis will pay the price for delays in unbundling the local loop.

“Unless Government rejects the Commerce Commission’s timid final report on unbundling and directs the opening up of access to Telecom’s copper wire, Kiwis will continue to pay higher costs, will have fewer services and a less competitive commercial environment for years to come,” says ihug CEO, Martin Wylie.

“The Commerce Commission’s failure to recommend unbundling is unduly protective of New Zealand’s largest and most profitable company. The incumbent’s position is so strong across all telecommunications markets. Almost all other countries have recognised that regulatory intervention is required to generate real broadband competition. The Commission’s radical reversal of its draft decision flies in the face of international experience and practice.

“When we compare the growth in broadband connections with that in other OECD countries, it becomes apparent that the status quo is just not working to the customer’s benefit. New Zealand’s position continues to decline relative to our trading partners, making our economy, particularly our exporters, less competitive.

“Unbundling will open the door to new and imaginative services for users and will put sustained pressure on Telecom to lower prices. The benefit of real competition has already been demonstrated in areas like Wellington and Christchurch, where Telecom has had to respond with lower prices to meet real competition. It would, however, be years before a full second cable network could be implemented everywhere in New Zealand.”

Nor is wireless the answer. “Wireless, as an alternate infrastructure, is relatively expensive and not yet proven by widespread adoption elsewhere,” says Wylie.
“To suggest that building a duplicate national wireless network is the right approach and an appropriate solution in New Zealand, is to ignore the value that can be added to the existing copper network by enhancing it with new broadband technologies. Nationwide networks take a long time to roll out. In the meantime another generation of broadband technology will be widely adopted in other markets leaving New Zealand even further behind.”

ENDS

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