Up to Minnows to Take on Telecom Over Service

The Commerce Commission is powerless to stop Telecom offering a wholesale internet service that does not meet aspects of the commission’s new minimum requirements.

The commission last week warned Telecom that its existing unbundled bitstream service package “differs significantly” from that outlined by the commission in its UBS regulations, which are due to take effect next month.

But under the Telecommunications Act, the commission can take action against Telecom on a specific offering only if approached by a service provider. This means one of the smaller internet service providers (ISPs) will have to stand up to industry goliath Telecom.

To access Telecom’s Jetstream service, ISPs need to sign a wholesale services agreement with Telecom. The details of the agreement are negotiated separately between Telecom and each ISP. If ISPs fail to reach a commercial settlement with Telecom, they can approach the commission in a bid to set terms and conditions.

The UBS service was recommended as an alternative to local loop unbundling by telecommunications commissioner Douglas Webb late last year. In his final report on it Mr Webb recommended Telecom should not have to provide open access to their network, but should provide broadband services in the form of UBS.

Telecom’s current offering is little more than a resold version of Jetstream, commission manager of network services Osmond Borthwick said.

“Our product is not closely tied to Telecom’s Jetstream product . . . it’s not limited by those characteristics.” An example is the cap on traffic that Jetstream has, which also applies to Orcon’s UBS service.

Telecom said that Orcon and Ihug will trial its UBS service until September 14.

TelstraClear, which is in negotiation with Telecom to provide a bitstream service, said it would be prepared to pursue regulation if it could not negotiate a satisfactory outcome.