SilentOne:
Anyways thats my drop in the stormy seas. Granted I don't like aspects of how Telecom works, but if they weren't here with the KiwShare agreement with the Government.. it really would be an offshore country looking after Our... My interests and that doesn't bode well.

SilentOne: Heh most probably.... Go Go WiMAX i say... DSL = old technology... bring on Wireless

SilentOne: Telecom is highly regulated as to what they can and can't do.

SilentOne: Telecom is highly regulated as to what they can and can't do. Prime example is how Telecom put in a bid to the ComCom to bypass the 5 yrear plan on mobile termination prices and lower all of its mobile prices over a 12 month period. The ComCom said it was anti-competitive..... so... recap.... Telecom offers to lower costs to other profiders to enter its cell network.. which would be passed onto the customer at cheaper rates... .. ComCom says no thanks.

SilentOne: Heh yea i know, they do seem to communicate poorly with the public and appear aloof and distant while standing behind their lawyers... but yes Telecom NZ are heavliy regulated.

For a time it looked as though, as its undertakings had stated, Telecom's  interconnection pricing would find a basis in cost, rather than the prices  it chose to list. However, the Privy Council took another view - one which
highlighted a fundamental flaw in the NZ model that has shaped the landscape  of competition every since.

In its ruling, the Privy Council stated:

"The introduction of efficient competition (by such anti-trust

legislation a section 36) did not in itself instantly remove the evils
of the monopolist's overcharging: it produced the conditions which,
by market forces, eventually force the monopolist of operate efficiently
(and therefore more cheaply) and to abandon policies of excessive
charging. Such legislation is neither effective nor apt to take the
place of regulatory proceeding. [However,] since the Commerce Act
contains the machinery for dealing with the monopoly rents [(section
53)]…,it would, in Their Lordships' view, be wrong to construe
section 36 so as to extend its scope to produce a quasi-regulatory
system which the Act expressly provides for, with all the necessary
powers and safeguards, in another part of the Act."

The Privy Council found that the Commerce Act, as it existed, provided the necessary tools to prevent monopoly abuse, should the government wish to use them, but that section 36 was not - as the regime's founders believed - an effective 'access regime' to provide entrants with reasonable access to necessary facilities. The Baumol-Willig rule was formulated in the United States, where regulations are designed to prevent monopoly profits. As the Privy Council noted, provisions existed elsewhere in the Commerce
Act to take action against monopoly rents, therefore, it considered it inappropriate to make such a judgement when considering Clear's section 36 application. The policy 'problem' for NZ's light-handed model had been batted firmly back into the court of New Zealand policy-makers.

In tandem with this court action, the Commerce Commission, following Clear's application to the High Court, initiated its own general inquiry into the telecommunications market. In a review prescient to the predicament of today's market, the Commission concluded that the Commerce Act and the Telecommunications Disclosure Regulations were unlikely to be effective in removing obstacles to competition in the industry. It stated:

"Telecom has become the de facto industry regulator; it owns

or controls most of the critical inputs, it competes with all the
firms to which it supplies those inputs, and, by and large, it makes
the rules under which competition is permitted to take place."

Telecom took the Commission to the High Court and succeeded in obtaining a ruling that the Commission had overstepped its powers in conducting such a broad inquiry. (Clearly, a ruling to this effect by the Commission would have been detrimental to Telecom's court defence against CLEAR and any potential policy response arising from it.) Ever since, the Commission's preference, in terms of substantive competition issues, has been that  

it should be private parties with sufficient resources that prosecute anti-competitive issues through the courts, rather than itself.

Politically, the Privy Council ruling was welcomed by Communications Minister Maurice Williamson. The process was seen as a vindication of the NZ model, whereby two private competitors had struck interconnection terms via the courts without a regulator. However, at official level, there was some disquiet, and a recognition that New Zealand was left without an effective access regime.

Questions were raised about the thresholds underpinning the Commerce Act, notably for a breach of section 36 that required proof not only of dominance, but also anti-competitive intent.

Changes to the Act, involving modifications to thresholds, are currently before Parliament - six years after the Privy Council ruling.

SilentOne: What I was getting at is that everybody initially in this post were comparing speeds, blaming it on LLU and the rest of it without thinking of other implications and reasons why the Government didn't enforce it last time. ComCom aren't stupid and wouldn't have been "glazened" with Telecoms "list" prices.. hence their enquiry. There must have been other reasons why LLU wasn't enforced, perhaps the position the country was in at that time didn't provide a viable option for LLU, or perhaps the way it had been rolled out in other countries was still to early to gauge the outcome and its benefits.

nzbnw:

centaurianz: I've gone back to 256kbps and a 40GB data cap.

Telecom's 3.5Mbps offerings are mandarins not oranges. (The data caps leave a sour taste in your mouth too!) In my book, if you're selling an orange - you should get an orange.

ADSL2 and unbundling, anyone?

ADSL2 Yes, Unbundling NO WAY.

Unbundling will not solve New Zealand’s problems, and besides why should Telecom have to give into the government on an issue that is really not their problem. Telecom as with all other businesses are here for one reason and one reason only, and it's not to make an operating loss. They way I see it is Telecom owns the lines end of story. And it is only because Telecom is doing well out of broadband that other ISPs want in. Telecom represents free business and the ideals of a free market, and those who say otherwise are merely communists. That’s my take anyways and I guess most of you would disagree, but before you do, think about this.

What would you do if you where Telecom. And don’t say unbundle the local loop.

Regards

Ben