KEY POINTS:
Coming, finally, early next year: the chance - for most at least - to choose your own phone company.
Proposed charges for other companies to use Telecom's local network were announced yesterday, allowing competitors to start setting prices for rival services.
The charge suggested in the draft is
$16.94 for urban areas and $32.20 for rural areas.
The Telecommunications Users Association predicted this would soon lead to real choice for both phone and internet users.
"Once local loop unbundling is complete, users can, if they wish, stop dealing with Telecom altogether," said chief executive Ernie Newman.
"It will open the way for customers to access services through other companies, which will obviously mean more competitive pricing."
Mr Newman believed urban users could expect to see alternative services being offered towards the end of this year or early in 2008.
Rural users would not see the effects as quickly, something that he said was a Government responsibility.
"It's a simple engineering reality that local loop unbundling will move more quickly in high-density urban areas. In rural areas it is an entirely different issue.
"The rural issue is about subsidies and that's something for the Government to look after, which it is starting to do with a discussion paper currently before the Ministry of Economic Development."
"Unbundled copper local loop" (UCLL) basically means Telecom is forced to allow other companies access to the copper wire that runs from exchanges to homes.
This means these companies - mainly internet service providers - will be able to install their own equipment directly into phone exchanges.
Third-party providers will not have to enter into separate agreements with Telecom in order to install their gear.
Orcon chief executive Scott Bartlett said the price set for urban lines "is at the top end of the range we had anticipated, but at that level urban UCLL investment is definitely viable".
"We will be pushing ahead with our investment plans," he said.
UCLL is likely to stimulate broadband pricing in major centres, but this is less likely outside cities.
Telecommunications Commissioner Dr Ross Patterson said the Commerce Commission's determinations were a crucial step in transforming the sector.
After consultation on the draft decision, the commission will make a final ruling in November.
The commission has acknowledged that sparsely populated rural areas will be more costly to serve than densely populated urban areas.