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NZ ordered to increase broadband competition

LLU given green light

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The Kiwi government is planning to drive through a series of measures to force incumbent telco Telecom New Zealand to unbundle the local loop and increase competition.

A raft of proposals - including LLU, increased regulation, and the promotion of investment by rival operators in fibre, wireless and satellite networks - are being put forward as a way to drag New Zealand out of the bottom third of the OECD's league table of broadband countries.

The Kiwi government has decided that key to this lacklustre performance is the lack of effective competition among broadband and telecoms providers.

"Telecom dominates the broadband market," it said in a statement, adding that rival operators are forced to rely on a "restricted speed 'unbundled bitstream service' (UBS) that allows limited options for competitors to develop differentiated broadband products."

Instead, it sees LLU - whereby rival operators are able to install their kit in the incumbent's exchanges to provide services direct to end users - as a way of increasing the provision of broadband in New Zealand.

According to the latest stats, there are currently more than 280,000 broadband users in New Zealand. But Communications Minister David Cunliffe said the package of measures was "a vital part of the government's drive to transform the economy and push New Zealand's broadband performance into the top quarter of the OECD".

"Access to fast, competitively priced broadband internet is vital for New Zealand to take full advantage of new technologies," he said. "This package will help ensure we catch up and keep up with other developed countries."

But Telecom has reacted angrily to the proposals, saying there are no guarantees that the measures "will deliver on the government's aims of high speed broadband throughout New Zealand".

"As we have told the Government in our submissions, high speed broadband services and the advanced products that will run on them require major investment from all players in the sector," Telecom exec Bruce Parkes said.

"Today's package actually tells players to put away any major investment plans and rely on regulation instead." ®

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