KEY POINTS:
It's not often Telecom's competitors greet pricing determinations handed down from the Commerce Commission with gratitude.
But speaking to a few internet industry executives this afternoon gave me the impression that the industry is reasonably happy with the draft pricing and terms set out for obtaining access to
Telecom's network under local loop unbundling.
The Commission's draft determination could change a fair bit in the next few months as submissions are received from interested parties, but the guts of what has been decided in principle is this:
* An internet provider will be able to rent the bit of copper than runs from Telecom's exchange to your house or business for $16.49 a month in urban areas and $32.20 a month for "non-urban" areas.
* Switching a customer over to an unbundled service will come with a one-off fee of $83.70, payable to Telecom.
* Telecom will have to allow competitors to rent space in its telephone exchanges so that additional equipment can be installed by those ISPs. That will cost the ISPs $20 per square metre used per month in Auckland, $14 per month per square metre in Canterbury, Waikato and the Hawkes Bay and $11 a month everywhere else.
* Submissions from the industry have to be into the Commission by August 29, with a final determination in November. Telecom will then start delivering the services two months after that.
All of that means that the local loop unbundling that was mandated by the Government last year to level the playing field between Telecom and its competitors will be in place for some of the country by next February - all going well.
For the industry the draft pricing is probably a bit of a relief. Figures in the $20 - $25 range and even higher had been bandied around for an urban unbundled loop. Ihug boss Mark Rushworth said the international benchmark is in the $12 - $18 range so he's reasonably happy with $16.49.
But he points out that the price of renting the copper is only one component of the overall cost of providing a broadband service - things such as renting international capacity and providing local backhaul to ensure there is enough capacity to service everyone's broadband connection have to be accounted for.
God knows, Telecom has struggled to get the mix right and it has the most experience in delivering services over copper lines.
The rural line price is likely to be slammed by farmers and those in rural communities, but I think the price is reasonable and points to the Government having something else up its sleeve to help out rural dwellers with crappy broadband.
I'm picking some sort of subsidised wireless service, a Project Probe type broadband network with private sector participation, perhaps similar to the Australian Government's WiMax deal with Optus and Elders.
Think fixed wireless services or even satellite broadband, which is getting cheaper to provide.
The devil of unbundling will be in the fiddly details and there are plenty of those.
For instance, Rushworth points out that the draft suggests Telecom will only have to unbundle 15 telephone exchanges per quarter with no mandatory rules on where should be unbundled first.
In theory then, Telecom could decide to unbundle the exchange in Gore before it opens up those in central Auckland.
The layers and regulatory bods at the ISPs will be working overtime in the next month to iron out the perceived kinks in this draft document, but they'll also be quietly optimistic that the unbundling regime is finally set to deliver some benefits.
