Ihug
[ Last Updated 2 November 2005 ]
Submissions: No. 27
Date Received: 2004-02-09
Original version: Submission Number 27: Ihug [20 KB PDF]
9 February 2004
Hon Paul Swain
Minister of Communications
Parliament Buildings
PO Box 18888
WELLINGTON
Dear Sir
I am writing to you to express our concern at the recommendation put to you by the Commerce Commission in respect of the unbundling of the Local Loop.
Introduction
Ihug’s submission to the Commerce Commission supported the draft recommendation that unbundling be adopted, on the basis that such action would be in the best interests of consumers by way of increased competition, leading to improved services and lower charges.
Additionally, it is our belief that unbundling would lead to increased investment in New Zealand by companies such as ourselves and support industry development, trade development and employment growth.
Ihug is extremely concerned at the apparent reversal of direction from the Commerce Commission and we believe that this process should be reviewed to allow more appropriate industry consultation.
Ihug maintains a strong preference for Telecom NZ to be required to unbundle their access network in a similar manner to the arrangements in neighbouring Australia. We could write pages on why we believe this and what benefits we see for the country. We have previously submitted our views to the Commission (these are available on the Commission’s website) and I am sure that many organisations such as TelstraClear are in the process of submitting similar views to you at present.
Rather than spelling out again our views on the benefits of unbundling, I will concentrate on clearly spelling out what we believe Telecom must be required to provide in the way of an ADSL Bitstream Access Service, if it is in fact to offer any benefit to the industry and customers.
In addition to the service description included as an appendix to the Commission’s report, we would like the following included:
Service Description of an ADSL Bitstream Access Service
Access to an unbundled bitstream service over a high speed broadband link between an end user’s building (or in the case of commercial buildings, the building distribution frame) to a DSLAM or other equivalent facility including the DSLAM and that part of the overall telecommunications link within the building that connects the end-user’s equipment in all markets in which Telecom faces limited or is likely to face lessened competition for that service; and markets determined by the Commission.
In addition to the already documented access principles, ihug believes the following must be mandatory.
- 1. Telecom must provide bitstream services equivalent to the range of broadband services it provides to itself, including as to grade of service and the range of versions and technologies used.
- In other words it should not be limited to 128kb/s or 256kb/s ADSL, but any other xDSL technology such as G.SHDSL, RADSL, VDS, at any speed.
- Additionally the service should include the options of QoS suitable for the likes of voice and video streaming, if Telecom provide that for its own customers.
- The service should not be subject to congestion or peak time speed limitations, unless all Telecom customers are similarly subject.
- The Commission shall not determine terms and conditions for supply of the service which are inconsistent with any reference unbundling offer of Telecom which the Commission, after consultation with interested parties, has approved.
- The bitstream service must be unbundled from value-adds such as international bandwidth.
- The service must be a true wholesale service, with Telecom billing only the access seeker and the access seeker maintaining the relationship with the end user.
- The service should be available for both residential and business customers on a nondiscriminatory basis.
- The service should incorporate QoS defined as packet prioritisation such that end-toend QoS measurements (latency, contention ratios etc) can be guaranteed.
- Ideally Telecom should be required to terminate the bitstream service on an LNS that the access seeker has control of via L2TP.
The initial pricing principle should be benchmarking against prices for bitstream services in comparable countries that result from the application to networks that are similar to the Telecom’s PSTN of a forward-looking cost-based pricing model. The final pricing principle should be TSLRIC.
The pricing must be for the unbundled bitstream service, for a specified speed and service quality. There must be no data caps or excess data charges.
Service Description of a Backhaul Service
The ADSL Bitstream Access Service must be provided in conjunction with an appropriate backhaul servi ce, a service which provides transmission capacity between an access provider’s exchange or site to the nearest available point of interconnection in a Local Interconnect Calling Area (LICA) group in all markets in which Telecom faces limited, or is likely to face lessened, competition for that service; and markets determined by the Commission.
Backhaul services shall include, at the access seeker’s request, the provision of redundancy to the access service.
Similar access principles and pricing should apply as for the Bitstream Service.
Service Description of Operational Support Systems
A service which provides access seekers with non-discriminatory access to Telecom’s operations support systems. Operations support systems include databases, processes and systems which perform pre-ordering, ordering, provisioning, maintenance and fault rectification and billing functions.
In addition to the already documented access principles, ihug believes the following must be mandatory:
- If Telecom provides any OSS functions on an electronic basis to itself, Telecom must provide equivalent electronic access to access seekers.
- The Commission shall not determine terms and conditions for supply of the service which are inconsistent with any reference unbundling offer of Telecom which the Commission, after consultation with interested parties, has approved
Conclusion
Unless Telecom is required to provide an ADSL Bitstream Access Service along the lines outlined above, the service will not work for the industry and its customers. If that happens, then the only viable alternative will be to revisit the full unbundling issue that the Commission are currently recommending against.
Yours sincerely
David Diprose
GM Networks & Engineering
Ihug Limited
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