Telecom request to exempt VDSL from unbundling rebuffed

Thursday 18th February 2010

Telecom has had its request to exempt third-generation technology from local loop unbundling shrugged off by the competition regulator.

The phone company will be obliged to offer any existing regulated bitstream services using Very high bit-rate Digital Subscriber Line (VDSL) technology to retail customers under the terms of the Commerce Commission’s ruling, Telecommunications Commissioner Ross Patterson said in a draft decision. He has adopted a “wait and see” attitude to extra services the company may want to offer on VDSL in the future.

“It is for Telecom to choose which DSL technology it wishes to use to deliver the regulated service, and it is not obliged to use VDSL,” Patterson said. “Telecom may use VDSL to deliver bitstream services with higher quality specifications than the regulated service, and can offer these services commercially.”

The telecommunications provider requested clarification on whether VDSL was covered by the unbundled bitstream access (UBA) standard terms determination, with general manager of industry & regulatory affairs John Wesley-Smith saying the company’s wholesale arm expects to launch “specific VDSL-2 based services” this year.

“If VDSL and future technologies are subsumed into the existing EUBA (enhanced UBA) and BUBA (basic UBA) services without Telecom Wholesale having the ability to charge a premium, this will destroy the value to Telecom Wholesale and the industry in any other VDSL-2 based services,” Wesley-Smith wrote in his October letter to the regulator.

Telecom was forced to split its retail, wholesale and network businesses by the previous Labour-led administration to speed up the process of local-loop unbundling and improve internet services. Since then Telecom has changed out its senior executives and John Key’s government has taken power.

Growth in unbundling the local loop slowed in the first half of last year after Telecom launched a wholesale loyalty offer that eventually fell foul of the regulator. The company’s stock was unchanged in trading today at $2.34. Submissions on the draft decision are open until the end of business on March 5.

Businesswire.co.nz

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