ULL & Friday Fryup

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sbiddle

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#7621 28-Apr-2006 17:23

For those who don't subscribe to Juha's great Friday Fryup newsletter he's started the rumor mill working overtime this afteroon by suggesting that we may see both ULL and a retail/wholesale split of Telecom going before cabinet on Monday.

"LLU happening next Monday?
Our mole in Wellington tells us that Cunliffe has indeed has a gutsful of
Telecom riding roughshod over regulation, the government's digital strategy
and customers alike, and has speeded up his promised industry stocktake
considerably. It will, moley tells us, be delivered to cabinet this Monday
already in fact.

We don't know much what the stocktake contains at this stage, but gather
that local loop unbundling is in and so is structural separation of Telecom
into network and wholesale operations. Well, the latter option seems to be
weak, and may be scrapped if Telecom belly-aches enough.

Here's hoping the government won't back out of structural separation,
because reports so far point to Telecom's NGN being pretty much "unbundling
proof" already, with fibre-optic circuits and roadside cabinets that don't
have room for competitors' equipment - adding gear inside Telecom's network
would be hugely expensive for other providers.

We'll know next week I hope if the above is true or not."

I guess if there is any substance to these rumors then things could suddenly become very interesting in this country!

juha

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#34232 28-Apr-2006 19:57

I want to be optimistic, and believe there's some real meat in what I've heard. However, looking back over a decade of inaction and NZ sliding down the OECD rankings in telecommunications, I'm not holding my breath for anything tremendously useful to come out of the Beehive.

That said, the Australians have showed the way by not only unbundling Telstra, but by splitting it into three separate units. Don't know why we always have to wait for Australia and then act two years or more after, but anyway...

Juha

JAMMAN2110

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#34235 28-Apr-2006 20:02

I'm starting to think about moving to Australia...
Sitting here waiting for something even close to what they have is killing me
I want fibre to my door (I know they only have that in certain places)

Jama

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#34238 28-Apr-2006 20:37

Also as reported in NBR today.

Telecom share price was up 13 cents today which certainly does not reflect the rumours.

juha

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#34239 28-Apr-2006 20:43

Jama: Also as reported in NBR today.
Telecom share price was up 13 cents today which certainly does not reflect the rumours.

Shareprice movements in greater detail here on the NZSX site.

I wouldn't be surprised if Telecom has struck a deal with the government that allows for, as I said, a sop to the public opinion while not hurting the bottomline at all.

Juha

Felix

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#34416 1-May-2006 16:18

quoting NZ's position in the OECD seems a little naive to me... where does NZ stand in the OECD as far as nuclear power is concerned? perhaps we need to concentrate on that... or education, or disease... in fact more importantly what is the comparison of GDP amongst OECD countries? The point I'm trying to make is that OECD countries are not evenly matched and therefore there are gaps in any area you may want to compare.

until some one finds a way around what economists call “selection effects” (if indeed this is desirable) gaps will always exist, and this is at the heart of the capitalist functions of all the countries in the OECD.

personally I believe that greater broadband penetration is a good thing (though many people have no desire for broadband, or internet at all), I just think the OECD comparison is not valid.

F5

juha

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#34419 1-May-2006 16:33

Drawing spurious comparisons with other OECD surveys and indicators without actually looking at what they mean is very likely to provide wrong results.

Telecom director and Business Roundtable chairman Rob McLeod wrote in the Dompost that:

The issue might therefore be one of affordability. The current level of penetration (about 20 per cent of households) puts New Zealand 22nd in the OECD, as the prime minister noted in parliament. This is about the same as New Zealand's ranking for income per capita, and broadband uptake is positively correlated internationally with incomes.

This suggests one remedy for the alleged problem is a more effective economic growth strategy to raise average incomes – on present policies, New Zealand is not on track to move up the OECD ladder.

In addition, the price reductions (including a dollar-a-day entry plan) and better services announced by Telecom will improve affordability. The new prices will be below average prices in other OECD countries. Further improvements in speed are in the pipeline with the rollout of the next generation of ADSL.

But InternetNZ's Colin Jackson didn't buy that facile comparison:

So, why are we now so behind? Mr McLeod says it is because broadband uptake is correlated with incomes, so New Zealand is getting the broadband it deserves.

This is just plain wrong. Running the numbers – which I assume Mr McLeod has not done – shows no correlation.

The country with the highest broadband uptake in the OECD – Korea – has one of the lowest incomes per capita, and the reverse is true for the United States. So that can't be the reason.

Is it because we enjoy free local calling? Mr McLeod says so. But Canada has free local calling and it has the second highest broadband uptake in the OECD.

Juha