TelstraClear challenges Telecom on broadband targets

Allan Freeth

An incensed TelstraClear has published full page ads in the country's metropolitan newspapers accusing Telecom of trying to back out of its commitment to open up the broadband internet market.

TelstraClear chief executive Allan Freeth said Telecom was trying to get around a commitment to have 83,000 of its residential broadband connections made available through other providers who buy wholesale bitstream service by the end of the year.

"This eleventh-hour attempt by Telecom to say everyone from the minister to the Telecommunications Commissioner - with the poor neglected customer in the middle - has got it wrong cannot go unchallenged," Dr Freeth said.

When Telecom released its first quarter profit results last Friday, its chief executive Theresa Gattung announced its residential broadband connections had surpassed its target of 250,000 residential broadband connections.

Connections rose 38,000 in the September quarter to 244,000 and surpassed the 250,000 mark in October.

Ms Gattung said that about 45 per cent of the growth during the quarter was from competitors' customers under unbundled bitstream (UBS) and wholesale broadband plans.

UBS is a wholesale high-speed internet service which allows other internet service providers (ISPs) access to Telecom's network to provide high speed internet services.

Telecom had a target of 250,000 residential broadband connections by the end of the year with a third of those, or around 83,000, to come from competitors under UBS and wholesale broadband plans.

But Ms Gattung said Telecom had never said 83,000 was a specific target, and had always said it expected a third of its growth towards that 250,000 target to come from wholesale plans.

"The 83,000 was simply a third of the 250 number, which is an easy misinterpretation to make, but it's always been very clear that the goal we set, our expectation was a third of the growth coming from wholesale and we are right on that track now," Ms Gattung said.

But the Telecommunications Commissioner Douglas Webb is backing TelstraClear.

"Telecom has been clearly informed that the target of 250,000 residential broadband connections monitored by the [Commerce] Commission require that more than a third of those connections will be resold Jetstream products or wholesaled bitstream services," Mr Webb said.

Mr Webb said the Commerce Commission confirmed these wholesale broadband targets in a letter send to Telecom in February.

Dr Freeth said regulations seemed necessary.

"The numbers show Telecom's UBS is not working and we look forward to a regulated outcome that provides us with a viable wholesale broadband service that customers will want to buy." In May, then-Communications Minister David Cunliffe said the Government would step in if Telecom failed to meet its agreed targets for broadband adoption.

- NZPA