Unbundle, Then Invest _ Tuanz

By PULLAR-STRECKER Tom

THE Telecommunications Users Association has warned that local loop unbundling is unlikely to benefit people outside the big cities unless a way can be found to encourage more investment in the telecommunications network that links Telecom’s exchanges and roadside cabinets to its trunk network.

Chief executive Ernie Newman championed unbundling, but admits that giving rivals access to Telecom’s copper phone lines — and thereby fragmenting demand for backhaul capacity on its network — will make addressing problems caused by under investment in Telecom’s network “sightly more complicated”.

“Suppose CallPlus decided they were going to do a foray into Ekatahuna and they got 100 broadband customers on the unbundled local loop and all of a sudden there was no exchange backhaul capacity to get that traffic to and from Masterton.

“Suppose CallPlus didn’t want to invest in that and Telecom said ‘they are not our customers, why should we invest?’, what then is the process?”#paraIn a submission to the Telecommunications Carriers Forum, the lobby group said discussions that the industry body is hosting to thrash out the details of unbundling would be “fatally flawed” if a way wasn’t found to deal with such situations.

“Without consideration to how backhaul will be provided in regional centres and towns, unbundling will have little or no benefit anywhere other than the main cbds. Regional broadband will receive no benefit from the decision to unbundle the local loop and the digital divide will continue.”

Mr Newman says everyone had known this problem would arise, but the association chose not to highlight it while it was campaigning for unbundling as it regarded it as a “second-generation issue”.

He would not say whether the association believed Telecom could be forced to invest in backhaul but accepts there are no such provisions in the recently-enacted Telecommunications Amendment Act.

Telecom last year offered to increase investment in its backhaul network by spending “hundreds of millions of dollars” rolling out fibre optic cable to almost all towns, but it withdrew the offer after the Government decided to regulate.

Mr Newman says there are a range of approaches that might be taken to address its concerns.

“Is there an obligation on a commercial party? Is there a process by which there can be commercial negotiations among various service providers or is this something where government or local government should step in?

“Or do we just accept that no matter how economic local loop unbundling may be in a particular area, if there is not an economic case for backhaul, people are not going to get service?

“We are flagging it as an unresolved issue. We just want to get it on to the agenda.” Mr Newman is confident this can be resolved.

Telecom spokeswoman Melanie Marshall says the working party set up by the Telecommunications Carriers Forum to establish the mechanics of unbundling is the right forum in which to discuss such concerns.

“Whether a formal process needs to be put in place we believe should be part of (its) discussions. We can’t make arbitrary decisions about this.”

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