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Topic # 84188 26-May-2011 10:12 Send private message

Just received:


Commerce Commission to issue proceedings against Telecom for discriminating against other telco companies
 
The Commerce Commission is to issue proceedings alleging that Telecom is likely to have discriminated under the Telecom Separation Undertakings. The Commission alleges that Telecom failed to provide other telecommunications service providers with unbundled bitstream access (UBA) in conjunction with the sub-loop extension service (SLES), when it provided an equivalent service to its own retail business.

The UBA/SLES service was intended to allow other telecommunications companies to provide their own voice services from unbundled exchanges in conjunction with a Telecom broadband service from a roadside cabinet.

The Commission considers Telecom’s failure to provide this service to other telecommunications companies while providing it to its own retail business has caused serious harm to competition in telecommunications markets, deterred efficient investment by other companies in telecommunications infrastructure, and resulted in significant commercial gain to Telecom.

“Telecom’s failure to provide this service has reduced the financial feasibility of unbundling local exchanges, reduced the extent of unbundling, and consequently reduced the extent of retail competition,” said Dr Ross Patterson, Telecommunications Commissioner.
As the proceeding will be before the Courts, the Commission has no further comment.
 
Background

Unbundled Bitstream Access (UBA) service allows telecommunications companies to supply broadband services to retail customers without the need to replicate Telecom’s copper local loop.
The UBA service 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).

Sub Loop Extension Service (SLES) is the copper connection between the local exchange and the roadside cabinet.

The SLES service provides a service provider or a Telecom business unit with access to, and interconnection with, the copper feeder cable running between a Telecom local exchange and an active Telecom distribution cabinet subtended from the exchange for the purpose of allowing the service provider or Telecom business unit to deliver services over sub-loop unbundled copper local loop (UCLL) service metallic path facilities (MPFs) from exchange based equipment, with the additional optional capability to combine exchange based services with a wholesale broadband service launched from a cabinet based DSLAM.

Separation Undertakings
In December 2006, the Telecommunications Act 2001 was amended. A key component of the amendments to the Act was Part 2A, which set out the requirement for the operational separation of Telecom.

The Act states that the purpose of operational separation is to:
• promote competition in telecommunications markets for the long-term benefit of end-users of telecommunications services in New Zealand; • require transparency, non-discrimination, and equivalence of supply in relation to certain telecommunications services; and • facilitate efficient investment in telecommunications infrastructure and services.

Part 2A was implemented by the Telecom Separation Undertakings, provided by Telecom to the Minister of Communications on 25 March 2008 in accordance with section 69K(2)(c) of the Telecommunications Act 2001.

Non-discrimination obligations were imposed on Telecom through clauses 31 and 56 of the Undertakings.

The Commission is responsible for enforcing the Undertakings. The Commission is investigating whether to take enforcement action under Part 2A of the Telecommunications Act.

Penalties
While the Commission can take enforcement action, it is up to the courts to impose penalties. It is important to note that the penalties set out below are the maximum. It would be up to the courts to set appropriate penalties.

If the Commission finds that Telecom has failed to comply with the Separation Undertakings, the Commission may request that the High Court impose penalties of up to $10 million for the breach, plus $500,000 per day for breaches continuing after the decision by the High Court. In addition, the High Court may order Telecom to pay damages to injured parties and may issue orders requiring Telecom to undertake other remedies, including injunctions restraining Telecom from behaviour that breaches the undertakings.

 







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  Reply # 474283 26-May-2011 10:31 Send private message

wow should be renamed the "fine telecom commission" ... seems to dish out almost a billion NZD total fines to telecom so far (amongst fining other people that is :))

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  Reply # 474284 26-May-2011 10:33 Send private message

[ i'm not saying telecom's innocent ... i am no laywer ... but telecom seems to get fined many times for a lot of money! ]

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  Reply # 474295 26-May-2011 11:05 Send private message

joker97: [ i'm not saying telecom's innocent ... i am no laywer ... but telecom seems to get fined many times for a lot of money! ]


i agree. give them a break 





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  Reply # 474299 26-May-2011 11:09 Send private message

Yep so poor, they are making so little money their profit is down to a tiny $380




Most problems are the result of previous solutions...

All comment's I make are my own personal opinion and do not in any way, shape or form reflect the views of current or former employers unless specifically stated 

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  Reply # 474316 26-May-2011 11:39 Send private message

The only winners in this debate will be the lawyers.

The ability to provide wholesale UBA access from a cabinet and also provide voice services from ULL gear in an exchange raises all sorts of debates, including the fact some ISP's chose to ignore the midspan injection issues and believed they wouldn't need to use wholesale UBA connection even after cabinetisation.

Is legal action because of poor technical decisions leading to poor business decisions a good move?


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  Reply # 474361 26-May-2011 12:43 Send private message

Is there some reason why terminating DSL on Telecom wholesale equipment in the cabinet and passing through POTS to non Telecom equipment the exchange isn't technically possible?

Telecom should/would have objected and negotiated new terms if it was not technically feasible. They've have done that for other obligations iirc.

Really the bottom lines is if Telecom had a separation obligation to meet and haven't met it there should be action.

Doing nothing when they don't meet obligations is the greater of two evils.


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  Reply # 474367 26-May-2011 12:50

Commerce Commission? When did you last hear it make any rulings over anything but Telecom?

I think the ComCom is just milking as much money out of Telecom as it can - while it still can.




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  Reply # 474412 26-May-2011 14:00 Send private message

Ragnor: Is there some reason why terminating DSL on Telecom wholesale equipment in the cabinet and passing through POTS to non Telecom equipment the exchange isn't technically possible?

Telecom should/would have objected and negotiated new terms if it was not technically feasible. They've have done that for other obligations iirc.

Really the bottom lines is if Telecom had a separation obligation to meet and haven't met it there should be action.

Doing nothing when they don't meet obligations is the greater of two evils.



It is technically possible because the solution does exist - that's what SLES is. The issue is one of conditions and pricing.

When a wholesale UBA connection is connected it runs over the MPF (copper pair) between the cabinet and premises. The wholesale UBA cost includes the cost of using this MPF.

If an ISP now wants to combine voice services from their own ULL equipment in the exchange they're going to need to use another MPF between the cabinet and exchange. Should rental of this MPF be free? If not, what should it cost?

Looking back Telecom's cabinetisation plans were originally to abandon much of the copper from exchanges to cabinets and rely solely on fibre. Voice was going to be delivered using a combination of ISAM voice cards using PSTN emulation and RGW's on the premises as the NEAX exchanges were switched off. All of this has been delayed with plans to now not shut down the last of the NEAX's until 2020.

There are already cabinets with no usable copper backhaul, instead voice services are provided over the fibre backhaul using VMUX's.


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  Reply # 474516 26-May-2011 18:16 Send private message

I see

Probably should be priced similar to EUBA tail extension a graduated scale starting from a few bucks a month up depending on how many aggregation points are passed till it gets to LLU gear... probably wouldn't work though.

It's quite interesting if you are connected to an exchange on Telstraclear, Vodafone, Orcon, or Callplus LLU gear they are allowed to get away with bundling DSL and voice, you can't elect to have voice with someone else other than the LLU provider.

Double standard ahoy!

Quite a few people who had landline with Telecom, DSL with Telstraclear (over Telecom wholesale gear) had massive problems when they were switched to Telstraclear LLU gear.  They didn't seem to take this possibility into account beforehand.

This also seems like a minor thing to be spending a lot of time on when you could possibly consider naked adsl + voip as "good enough" competition. 

I'm more interested in why the ComCom have allowed the landline service to be undervauled and allowed the cost of naked vs standard to be so close when there is a much greater difference overseas.

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  Reply # 474671 27-May-2011 09:06 Send private message

The thing is I have lost about $20/month (conservative) because of Telecom SLES. I am unable to use unbundled bitstream as SLES interferes with it even though my local exchange supports it (and has it). I am forced to use Telecom's cabinet and my ISP has to pay them their rate for it. Telecom most definitely deserves to be fined for this, however I believe I am owed proceedes of the fine, since I have suffered materially because of it.

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  Reply # 474689 27-May-2011 09:48 Send private message

amorangi: The thing is I have lost about $20/month (conservative) because of Telecom SLES. I am unable to use unbundled bitstream as SLES interferes with it even though my local exchange supports it (and has it). I am forced to use Telecom's cabinet and my ISP has to pay them their rate for it. Telecom most definitely deserves to be fined for this, however I believe I am owed proceedes of the fine, since I have suffered materially because of it.


I'm a little confused by your post.

If you're served from a cabinet you should be being supplied wholesale UBA internet because ULL connections via a cabinet introduces midspan injection issues which will hamper speeds. This isn't a Telecom/Chorus problem, it's the fact ISP's chose only to install equipment into exchanges and not cabinets.

The SLES service still revolves around whole UBA internet access being provided from the cabinet, however voice services can be provided from ULL gear in the exchange.




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  Reply # 474691 27-May-2011 09:55 Send private message

One thing I am confused about, a lot of the commentary from other ISP's seem to be around Telecom decided to cabinetise, however Telecom only did this as part of their Separation Undertakings (Government mandated agreement).

If this disagreement is due to Telecom cabinetising, a situation which provides a significant proportion of customers with faster broadband, where there is space within the whisper cabinets if another provider wants to put their equipment into it. Why is the ComCom looking at it, as Telecom only did what they were legally required to do.

Or have I missed something fundamental?

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  Reply # 474697 27-May-2011 10:14 Send private message

swalker5872: One thing I am confused about, a lot of the commentary from other ISP's seem to be around Telecom decided to cabinetise, however Telecom only did this as part of their Separation Undertakings (Government mandated agreement).

If this disagreement is due to Telecom cabinetising, a situation which provides a significant proportion of customers with faster broadband, where there is space within the whisper cabinets if another provider wants to put their equipment into it. Why is the ComCom looking at it, as Telecom only did what they were legally required to do.

Or have I missed something fundamental?


You're confusing the separation between Telecom / Telecom Wholesale / Chorus slightly.

The equipment in the cabinets installed by Chorus offers wholesale internet access to every ISP on the same terms that are set by the Commerce Commission. Telecom retail pay the same price for access as any other ISP does.

The cabinetisation plans existed well before ULL took place. Many ISP's who were excited about ULL seemed to completely ignore warnings about midspan injection issues which has ultimately hampered their rollout plans and means that they can now only service a small % of the total customer base from their ULL gear.

Because voice services are still provided from the exchange the copper running between the exchange and cabinet is still required to be used for customers who need voice. Chorus developed the SLES product to enable providers to rent this copper, and this product has been used by Telecom Retail since they are the biggest voice provider in NZ.

Other ISP's offering ULL services who are unable to serve customers with ULL internet from the exchange because the customer is cabinetised have to offer wholesale UBA internet services to the customer from the cabinet. They want to be able to offer their own voice solution to customers based on PSTN emulation (POTS delivered over copper) from the exchange so the customer doesn't have to remain with Telecom Retail for voice. Their issue is over the price and access to this service.

As pointed out above no ISP offering ULL internet lets you chose Telecom Retail as a voice service provider, which in some ways could be seen as throwing stones in a glasshouse..


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  Reply # 474705 27-May-2011 10:51 Send private message



If you're served from a cabinet you should be being supplied wholesale UBA internet because ULL connections via a cabinet introduces midspan injection issues which will hamper speeds. This isn't a Telecom/Chorus problem, it's the fact ISP's chose only to install equipment into exchanges and not cabinets.


As far as I'm aware it's not a "choice" that ISPs put their own equipment in cabinets - they simply cannot.

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  Reply # 474710 27-May-2011 11:01 Send private message

As far as I'm aware it's not a "choice" that ISPs put their own equipment in cabinets - they simply cannot.


They can and do, but at a rate set by the comcom that breaks it as a business case, but no technical or contractual reason otherwise.

Cyril

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