The Commerce Commission recommended that Telecom New Zealand be forced to provide new entrants with wholesale DSL services to allow them to develop and offer to consumers their own range of broadband products.
However, the NZCC has pulled back from recommending other aspects of the telecommunications network be unbundled. For instance, it has not recommended that the local loop be unbundled, which would allow other operators to install ADSL infrastructure in a telecommunications exchange.
"The Commission is no longer recommending unbundling of the local loop, because of what we have learnt about the costs and difficulties of that solution in comparison with the potential benefits," said the New Zealand Telecommunications Minister, Douglas Webb. "Instead, the Commission considers that a direct focus on high-speed Internet access produces higher benefits for consumers, through lower prices and innovation, and will also act as a spur to further improvements in Telecom's efficiency."
The Commission did not recommend any unbundling of other elements of Telecom's fixed public data network beyond those elements supporting the ADSL service. "The decision not to recommend unbundling of other elements has been influenced by Telecom's recent announcement of an Unbundled Partial Private Circuits services offer that has the potential to provide a commercial solution to a competition problem in the supply of high grade data services to corporates and other large users," said Webb.
"The Commission would have favoured further unbundling had Telecom not offered a market-led solution," said Webb. "We think the Telecom proposal has potential to meet the needs of the industry and major business users. The Commission intends to monitor these developments. Should a suitable outcome fail to eventuate within the next six months, the Commission considers the case for regulated unbundling in that market should be revisited."
Bruce Parkes, general manager, government & industry Relations for Telecom New Zealand said the incumbent was "totally committed" to making the Unbundled Partial Private Circuits services offer work. He added that Telecom would be studying the proposal in detail.
