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The Commerce Commission today commenced a review to determine whether Telecom New Zealand Ltd faces limited competition in the provision of the unbundled bitstream access (UBA) service. The supply of the UBA service became subject to a competition test from December 2009. The UBA service allows telecommunications operators to supply a range of broadband services and gives them the ability to differentiate their retail products from Telecom’s retail broadband services.
Telecom is required to supply the regulated UBA service to other telecommunications operators throughout New Zealand. Where the Commission finds that Telecom faces limited competition in an area, then the regulated UBA service will remain available in that area. In other areas where Telecom is not found to face limited competition, then it is likely that Telecom would no longer be required to provide the regulated service.

The Commission is today seeking information from providers and purchasers of wholesale broadband services, including Telecom. The Commission will consider the information received before releasing a draft review report. The Commission is expecting to release this report by mid September 2010.

Information about this project can be found on the Commission’s website under: www.comcom.govt.nz/unbundled-bitstream-standard-access-service


Background
Unbundled bitstream access
The ‘unbundled bitstream access service’ (UBA service) refers to the service that enables access to, and interconnection with, that part of Telecom’s fixed public data network that connects to the end-user’s building to Telecom’s first data switch (or equivalent facility) other than a digital subscriber line access multiplexer.(DSLAM). The UBA service allows telecommunications companies to supply broadband services to retail customers without the need to replicate Telecom’s copper local loop.

Telecom (Wholesale) is the Telecom business unit that supplies the UBA service.

The Commission’s Standard Terms Determination that regulates the price and non-price terms for the UBA service and related documents, including executive summary, can be found at www.comcom.govt.nz/unbundled-bitstream-standard-access-service/

Process for the section 30R review
The competition review will occur under section 30R of the Telecommunications Act 2001 (the Act). Section 30R provides that the Commission may, on its own initiative, commence a review, at any time, of all or any of the terms specified in a standard terms determination.

Guidelines to the process for reviewing STDs under section 30R can be found on the Commission’s website at www.comcom.govt.nz/review-of-standard-terms-determinations/

Scope of and timeline for the section 30R review Part 2, Schedule 1 of the Act states that a competition assessment must be applied to the UBA service, three years from the date on which the Telecommunications Amendment Act (No2) 2006 was enacted.

This competition assessment must assess whether Telecom faces limited, or is likely to face lessened, competition in a relevant market. If this threshold is met, the UBA service in the relevant market will remain regulated. If the threshold is not met, the UBA service may no longer be required to be made available in the relevant market.

The Commission intends to release a Draft UBA Service Review Report outlining its preliminary views by Wednesday 11 August 2010. Submissions are likely to be due on the Draft Review Report by Wednesday 1 September 2010. A separate media release will confirm the release of the report and the closing date for submissions.

The Commission expects to release the Final UBA Service Review Report and give public notice of the result of the review by Wednesday 1 December 2010.