Telecommunications Act: Draft determination

Media Release

Issued 21 April 2005

Telecommunications Act: Draft determination on bitstream

The Commission today released its draft determination on an application by TelstraClear for regulated access to Telecom’s bitstream service. Bitstream allows other telecommunications providers, including ISPs, to deliver broadband services to New Zealand consumers using Telecom’s asymmetric digital subscriber line (ADSL) network infrastructure.

The Commission’s preliminary view is that Telecom should provide TelstraClear with a bitstream access service available nationally with characteristics which differ from Telecom’s commercial bitstream service currently available to telecommunications providers. The regulated bitstream service will allow TelstraClear to provide higher speed, differentiated ADSL broadband offerings to consumers using Telecom’s ADSL platform.

“Access by TelstraClear to the regulated bitstream service will increase competitive pressures in the broadband market and provides the opportunity to significantly enhance the speed, services and choice of ADSL broadband offerings available to all New Zealanders” said Douglas Webb, Telecommunications Commissioner. “This should drive the growth of bitstream as a platform for the delivery of broadband services across New Zealand”.

The Commission invites written submissions from interested parties by 6 May 2005. A copy of the Commission’s draft determination is available on the website, www.comcom.govt.nz, select Telecommunications Regulation, Wholesale determinations, TelstraClear Wholesale Bitstream Service.

Executive Summary
(i) The bitstream access service enables other carriers to utilize Telecom’s asymmetric digital subscriber line (ADSL) infrastructure to deliver broadband services to end-users.

(ii) On 5 November 2004, the Commission received an application from TelstraClear requesting that the Commission determine price and non-price terms for the supply of bitstream access and backhaul services by Telecom. On 18 April 2005, TelstraClear withdrew its request for the bitstream backhaul service.

(iii) This draft determination sets out the Commission’s preliminary views on the application. A final determination will be issued following consideration of submissions.

(iv) The Commission’s key conclusions are that:

- Telecom faces limited competition in a national wholesale market for the provision of broadband services;

- Telecom will be required to provide a bitstream access service to TelstraClear with a non rate-shaped downstream speed up to the maximum capacity of the DSLAM, and an upstream speed of 128kbps;

- the initial wholesale price for bitstream access for TelstraClear to supply services to residential end-users is $26.19 excluding GST (being an imputed retail price of $31.19 less internationally benchmarked avoided costs saved of 16%);

- the initial wholesale price for bitstream access for TelstraClear to supply services to business end-users is $25.87 excluding GST (being an imputed retail price of $30.80 less internationally benchmarked avoided costs saved of 16%);

- Telecom is required to supply TelstraClear with bitstream access with no material difference between the network-based characteristics supplied to TelstraClear and bitstream used by Telecom to supply its own retail services;

- Telecom is required to provide reporting of key service parameters to ensure consistency of service is achieved; and

- the inception date of the determination should be the date of determination, with an expiry date twenty-four months after the date of determination.

ENDS

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