Paul Reynolds: Seizing spirit of separation

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Monopoly mindset belongs to days gone by, writes Telecom chief executive Paul Reynolds.

Chris Barton's article, A Kinder, Gentler Telecom? Yeah right had a certain Groundhog Day character - different day, but the same old article about an intransigent Telecom New Zealand intent on replacing one monopoly with another, to the detriment of consumers and competitors.

It's time to wake up and face some facts.

Telecom has changed. We have embraced both the letter and the spirit of operational separation and have established two new, vibrant organisations - Telecom Wholesale and Chorus - to serve New Zealand's telecommunications industry.

At the heart of the change is our recognition that customers in New Zealand want more choice of services and service providers and that Telecom has a major role in supporting increased choice by becoming more open, more transparent, and by providing innovative wholesale services.

The feedback I have received about the changes underway from Government, industry CEOs and industry bodies such as TUANZ, has been overwhelmingly positive. But of course there is much more to do, and the thousands of men and women working at Telecom are determined to get on with it and provide great communications services for New Zealanders.

In fact we have already begun laying thousands of kilometres of extra fibre and installing a network of 3500 roadside cabinets that will bring households closer to the network.

Anticipating industry needs, we have expressly designed the cabinets to allow for multiple service providers to install their equipment, and we have proposed commercial terms for them to interconnect.

We've been talking to the industry about this progression to a next-generation network for more than a year now.

So "cabinetisation" is not a dirty word. It is simply the next step in the steady march of telecommunications technology. It means Telecom is investing $1.4 billion in the building of a new optical fibre network that will bring fast broadband to every town and village with 500 lines or more, right across New Zealand.

No other country in the world has plans to bring optical fibre to every population centre of this size. Cabinetisation represents one of the most significant infrastructure investments underway in New Zealand today and one that is critical to our broadband ambitions. It's also one of the biggest investment commitments Telecom's board and shareholders have ever made.

We should be pleased that the discussions between Telecom and the Minister of Communications on operational separation have created the investment confidence for Telecom to make this world-class undertaking.

Are we blocking access by other communications companies to this world class network? Not a bit of it!

Is this approach different from the rest of the world? You bet it is. In the United States and Germany, where mainly urban fibre networks are being built, the incumbent telcos have received regulatory dispensation from sharing them. Here's more proof that over the past year New Zealand has moved decisively from the back foot to the front foot in the world of fast broadband.

The new network will form the backbone of next generation services and applications such as VoIP, as well providing a much better broadband experience over traditional copper lines.

Telecom is not closing telephone exchanges as part of the cabinetisation process over the next four years. The number of exchanges in which other providers are choosing to install their equipment is rising steadily, as illustrated by Orcon's announcement - the same day Barton's article appeared.

Internet service providers who are customers of Telecom's Wholesale business can also choose to deliver services to their own customers via unbundled bitstream products.

Already over 300,000 of our Wholesale customers in more than a hundred exchanges across the country access the internet using the latest ADSL2+ electronics, supporting peak download speeds of well over 20 Mbps. And while this roll-out proceeds we're testing the next generation of high-speed broadband equipment in our labs, VDSL2.

Telecom Wholesale is also working closely with WorldXChange, an Auckland ISP customer, to provide fibre-based VoIP and broadband services in Orewa's new Kensington Park subdivision. And Kensington Park is just the first in a number of such developments. WorldXchange will provide these new services ahead of Telecom's retail business - hardly the act of an intransigent monopolist!

Barton talks about the challenge of achieving economies of scale, but all providers - Telecom included - face these difficulties. Telecom is grappling with the challenge of rolling out our fast network to more remote and rural areas.

None of these facts add up to a case for "anti-competitive intent". They prove the opposite.

- NZ Herald

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