TelstraClear wants a bigger piece of DSL cake

Unhappy with what it terms as games by Telecom New Zealand Ltd. that undermine competition, rival telco TelstraClear yesterday announced that it has lodged two applications with the Commerce Commission for regulated access to Telecom services.

The two services in question are the business-grade Digital Subscriber Line (DSL) Private Office Networking (PON) offering and the wholesale unbundled bitstream service (UBS).

PON runs over its own ATM virtual circuit from DSLAMs in telephone exchanges, says TelstraClear’s regulatory and industry affairs manager, Grant Forsyth. It offers a lower contention rate (the number of subscribers sharing the connection) than standard Telecom residential and business DSL and a higher quality of service. PON is an attractive option for many businesses, according to Forsyth, but he claims Telecom has so far not been willing to negotiate access to PON for TelstraClear.

The residential UBS DSL in its current state is also unsatisfactory for TelstraClear. According to Forsyth, TelstraClear has unsuccessfully been seeking clarification as to exact specifications of the service, rather than the vague “Internet grade” service level that Telecom mentions in its UBS documentation.

TelstraClear expects the specifications for UBS to at least match those of Telecom’s own DSL service, and has asked the Commission to regulate it. Additionally, Forsyth says TelstraClear has asked for every download speed technically possible — in amendments to the Telecommunications Act, access seekers are not allowed to vary the low 128kbps upstream speed when applying for determinations, only the downstream speed.

TelstraClear also describes the NZ$100 (US$69) churn fee that Telecom imposes on UBS providers each time a customer switches ISPs as being “anti-competitive”. In its current form, UBS would have TelstraClear “locked into providing a service without being able to assure our customers of any grade of quality for it,” Forsyth says.

Asked when TelstraClear decided to lodge the applications, Forsyth says that negotiations with Telecom have been underway for years but not led to any real progress. “We have been negotiating for the provision of a Layer 2 product similar to what Telstra Australia provides but Telecom has pretty much stonewalled us,” he says.

The continuing delay of the Layer 2 UBS in New Zealand as well as Telecom launching much faster retail DSL service in direct competition with the wholesale variant were also catalysts for the applications, Forsyth says.

He expects the application process to take some six to nine months to complete. Meanwhile, TelstraClear will not have a UBS product to resell, which Forsyth says is unfair. “In every other jurisdiction, the incumbent telco cannot launch a retail service before it has a wholesale equivalent ready,” he says.

Telecom’s general manager of industry and government relations, Bruce Parkes, says the company is nonplussed by TelstraClear’s decisions to apply for determinations.

Parkes says Telecom has met its commitments under the regulator’s determination, and is certainly open to negotiations. This includes both the regulated products as well as others such as PON. Told that TelstraClear wanted the service quality defined, Parkes says it is Telecom’s intention to provide a UBS that has identical specifications to its retail Jetstream service.

Asked if it was fair to say that Telecom has been procrastinating in the negotiations, Parkes says no — and adds that’s a case of the pot calling the kettle black.

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