Unbundled Bitstream Service

20 December 2005

Unbundled Bitstream Service

The Commerce Commission’s final determination on TelstraClear’s application for UBS appears to be substantially the same as the conclusions in its October Statement of Consultation.

“We remain concerned that the ‘one-size-fits-all’ approach used by the Commission will hurt rural New Zealand in particular because it will focus broadband investment on more lucrative urban areas,” Telecom General Manager Government & Industry Relations Bruce Parkes said today.

“The model used by the Commission could mean that customers on long lines – again, usually rural customers – would get a poorer broadband service than now,” Mr Parkes said. “The Commission itself has acknowledged that risk.

“The Commission’s flat rate price of $27.87 represents an increase on the wholesale entry level plans now available to ISPs. In the long run this is likely to make low-speed broadband customers worse off.”

Telecom recently applied for a judicial review of the Commission’s proposed pricing of the UBS service, because it believed the Commission was mistaken in its use of the Telecommunications Act’s Initial Pricing Principle to arrive at one price for all UBS plans.

To avoid delays, Telecom agreed that the Commission should go ahead with today’s determination, in return for a guarantee of a prompt hearing if Telecom needed to challenge the determination.

Mr Parkes said it was likely Telecom would challenge the determination, with an appeal or a continuation of the judicial review proceedings.

“Broadband is a top priority for Telecom and we want to ensure our customers and the customers of other ISPs get the best broadband services possible,” Mr Parkes said.

ENDS

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