Moratorium appeal for local loop unbundling

By PETER GRIFFIN

The first regions to go ahead with rural broadband initiatives are appealing to Government for a two year moratorium on local loop unbundling as they stand behind the wireless providers who have brought them broadband competition.

Venture Northland and Venture Southland claim opening Telecom's copper line network to access by competitors will only serve to undermine the estimated "$200 million" that has so far been invested in alternative wireless networks, much of it in Project Probe regions.

The regional bodies backed by the mayors of the Far North and Southland, make a late debut on the lobbying scene ahead of this week's final determination from the Commerce Commission on whether unbundling should proceed.

Southland mayor, Frana Cardno, with $3.4 million invested by Government in the Southland broadband scheme being built by Woosh Wireless, it was time to give the new entrant a chance to grow.

"We're very excited about what we're getting and we don't want it undermined at all," she said.

"Operators like TelstraClear showed no interest in us before."

Venture Northland chairman Chris Mathews said unbundling would allow new entrants to use Telecom's network as a means of competing with wireless providers who had taken considerable risks going into the regions.

"Now we face a situation where unbundling will favour companies that did not participate in Probe, and have not borne any of the business risk and hard work that comes with big ticket infrastructure investment."

While the regional bodies had never been "Telecom's biggest fans", their stance on unbundling aligns them with the monopolist telco. They said unbundling should go ahead in two years time if it was found that the wireless operators were not stimulating sufficient competition to encourage subscriber growth.

But they disagree entirely with Telecom on the make up of the Kiwi Share, which all telcos, Woosh among them, must contribute to.

Venture Southland, Venture Northland, and Go Wairarapa are urging the commission to build a new model that takes wireless network services into account when calculating the Kiwi Share loss that Telecom faces in providing basic telephone and internet services nationally.

While enthusiastic regional bodies are backing up their technology partners in the anti-unbundling camp, telecoms analyst Paul Budde remains cynical at their opposition.

In a paper released last week he criticised Woosh, which is active in both Northland and Southland, for its opposition to unbundling.

It is a rare occasion when a telco competitor sides with the incumbent, and that, in itself, should be a warning sign," Budde wrote.

"It demonstrates to me that, even at this early stage, the company is worried about fixed line competition perhaps not so much from a very sluggish Telecom, but maybe from far more eager companies such as TelstraClear, who might want to use wholesale DSL to push broadband into New Zealand."