VDSL decision confirmed by Commerce Commission

VDSL decision confirmed by Commerce Commission

The Commerce Commission has today issued a decision related to Telecom’s use of VDSL technologies in the provision of wholesale broadband services.

The Commerce Commission confirmed that if Telecom Wholesale were to employ VDSL technology to deliver the regulated bitstream service used to provide broadband, (ie, the unbundled bitstream access service, UBA) then it must do so on the regulated terms and conditions, including price.

However, if Telecom Wholesale were to use VDSL technologies to deliver a service with specifications that do not fall within the regulated UBA service (for example, a higher quality of service that is not covered by the existing regulation), then it may do so on a commercial basis.

The Commission considers that ongoing monitoring of VDSL-based bitstream services, rather than regulation, is appropriate at the present time. In reaching this decision, the Commission considered the following factors:
VDSL deployment is in its infancy in New Zealand, with Telecom yet to launch VDSL-based services;
TelstraClear is already offering retail VDSL services in the market; and
Telecom has committed to providing wholesale VDSL-based bitstream service to access seekers on a non-discriminatory basis.
“The Commission’s view is that Telecom should be allowed to offer, on a commercial basis, new wholesale broadband services that are not currently regulated, provided Telecom offers the new VDSL services to other telecommunications companies on the same terms as to Telecom’s retail units and to the same equivalence standards as applies to the regulated services,” said Dr Ross Patterson, Telecommunications Commissioner.

“VDSL is an emerging technology which is capable of delivering significant benefits to consumers such as increased speeds and facilitation of the development of innovative new services,” said Dr Patterson. “It is important that incentives for investment in new DSL technologies such as this are preserved, so that consumers are able to receive the benefits associated with such innovations.”

“The Commission will continue to closely monitor any new services that Telecom provides using VDSL technology and would only consider launching a section 30R review under the Telecommunications Act if there was evidence that the market was not competitive,” said Dr Patterson.

In making its decision, the Commission has provided draft clarifications to the standard terms determination that regulates unbundled bitstream access. Under the proposed clarification, Telecom will be required to provide notice of new bitstream variants to the Commission and to exclude the price of commercial VDSL services from the calculation of the price of the regulated services.

The Commission’s decision and the proposed draft clarification are available on the Commission’s website at http://www.comcom.govt.nz/IndustryRegulation/Telecommunications/StandardTermsDeterminations/UnbundledLocalLoopService/DecisionsList.aspx#1273

Background

In December 2007, the Commerce Commission issued its final determination on the price and non-price terms on which Telecom must make the unbundled bitstream access (UBA) service available to other telecommunications providers.

Decision 611 can be found on the Commission’s website www.comcom.govt.nz/IndustryRegulation/Telecommunications/StandardTermsDeterminations/UnbundledLocalLoopService/DecisionsList.aspx#862

In February 2010, the Commission issued a draft decision on how the application of the unbundled bitstream access standard terms determination (UBA STD) relates to services delivered over VDSL.

Unbundled bitstream access (UBA) is a regulated wholesale service that allows telecommunications companies to supply a range of broadband services to retail customers. UBA refers to the wholesale broadband service provided by Telecom from the end-user to the first data switch, or equivalent facility, other than a Digital Subscriber Line Access Multiplexer (DSLAM).

Decision 611 covers both basic unbundled bitstream access (BUBA) and enhanced unbundled bitstream access (EUBA).

Regulated bitstream is a relevant wholesale service under Telecom’s Operational Separation Undertakings. This means that Telecom Wholesale is required to provide those services covered by the UBA standard term determination on the same basis to its own retail arm, Telecom Retail, as to other telecommunications companies such Vodafone, Orcon and CallPlus.

Standard Terms Determination process under amended Telecommunications Act. On 22 December 2006, the Telecommunications Act was amended to incorporate a process for the Commission to make a standard terms determination on which a designated access or specified service must be supplied by Telecom to all access seekers requesting the service. A standard terms determination includes non-price terms proposed by Telecom, usually in consultation with access seekers, and price terms for access to the service set by the Commission.

VDSL (Very high bit-rate Digital Subscriber Line) is a DSL technology which provides faster data transmission over copper wires. VDSL is capable of supporting high bandwidth applications such as high definition television as well as telephone services, such as Voice over IP, and general internet access, over a single connection.

ENDS

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