Telecom's new core network plans raise concerns

Telecom's plans for its new $1.4 billion core network are being executed behind closed doors in a deliberate ploy to avoid comprehensive regulation, say its competitors.

Telecom is planning to replace its traditional phone system with a high-speed network of voice, data and video services over the next 10 years - called the Next Generation Network (NGN).

This will include new services such as voice-over-internet, and sophisticated data packages for big business which require new commercial deals between Telecom and its wholesale customers.

Ihug regulatory manager David Diprose said Telecom had developed its NGN with no involvement from the other providers in the industry.

"Telecom has so far gone down its own path to meet its own needs and not the needs of New Zealand as whole."

The current unbundling legislation - the Telecommunications Amendment Bill, which forces Telecom to share its network with its competitors - does not include any regulation of its NGN.

Diprose said Telecom would have an opening to be anti-competitive if the NGN was not regulated.

In order for NGN to be put in place, Telecom is abolishing most of of its exchanges - which the traditional fixed-line services run through - and replacing them with a smaller number of centralised devices, known as roadside cabinets. Network equipment would also move to its roadside boxes.

"If Telecom removes an exchange and replaces it with a centralised device, then you have to ask what access we will have to the customers," said Diprose.

"If we put a DSLAM [which provides high-speed broadband] into an exchange and then two months later, they turn that exchange off, then our DSLAM can't be used anymore."

British regulator Ofcom has said that the introduction of NGNs was the most significant change to telecommunication networks since competition was introduced two decades ago.

Ofcom included NGN in the legislation that created British Telecom's operational separation plan. An industry collaboration group called NGN UK has been developed.

Under the legislation, British Telecom could not make NGN decisions that would shut off services without adequate consultation with providers.

Telecommunications lawyer Michael Wigley, who represents internet service providers, said it was "striking just how much weaker the Telecom's proposed plan is from the BT solution.

"Left as it is, we will have ongoing serious problems in the years to come. That's something that BT and ... Ofcom, have worked hard to avoid."

Telecom spokesman John Goulter said it would talk about other services when they were of more immediate interest to wholesale customers.

"Our proposed model of operational separation goes further then BT's because from the start it includes the new NGN services ...

"We cannot predict what decisions will be made, but in principle the new environment is about a level playing field for all competitors."