Draft Unbundling Recommendation Illogical

DRAFT UNBUNDLING RECOMMENDATION ILLOGICAL

Any decision on local loop unbundling will have to take extreme care not to wreck the burgeoning competitive broadband market that is developing in New Zealand, Telecom said today.

"What we've seen today from the Commerce Commission is very much an early view, but on the face of it, the draft recommendation goes too far," Telecom General Counsel Mark Verbiest said.

"Even the Commission admits it is impossible to say if there's any international proof that unbundling delivers results, but then it has recommended an intrusive unbundling regime.

"It's a lot more intrusive than Australia's form of unbundling, and it comes on top of New Zealand's wholesaling rules which are far wider than Australia's.

"We'll be looking at the draft very closely over the next few weeks,as will everyone who has an interest in New Zealand's telecommunications market.

"There are a host of broadband providers emerging in New Zealand who are giving Telecom a run for its money, generally using wireless technologies.

"There's a real risk that going too aggressively down the unbundling path would stop those developments in their tracks because there would be no more incentive to invest in alternatives.

"That would be a sad day for consumers who thrive with strong competition using alternative technologies.

"Eventually the Government will have to make a call on this issue, once the Commission has produced its final recommendation.

"At that point, the Government will surely conclude that its own PROBE process is a whole lot more successful in encouraging the spread of broadband than any artificial regulatory intervention could ever be.

"With PROBE still in its early days, Telecom's JetStream product is already available to 85% of New Zealanders and we'll be working with BCL and then with satellite providers to get broadband to all communities very soon. At the same time, PROBE is encouraging other players into the market.

"So any observer would be hard-pressed to find the problem that unbundling is trying to solve," Mr Verbiest said.

ENDS

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