What is happening?
The Government has announced its intention to drastically alter the way that broadband, and other telecommunications services, are delivered in New Zealand. This has been the result of a long intensive lobbying process by telecommunications providers like Orcon.
The Governments announcement includes the following key changes:
- Local loop unbundling, to allow other telecommunications companies to use Telecom's network
- Enhanced information disclosure and an enhanced Commerce Commission monitoring role
- Accounting separation of Telecom's wholesale business operations
- Removing speed constraints on the existing regulated unbundled bitstream service, including providing for "Naked DSL"
- Encouraging investment in alternative infrastructure such as fibre, wireless and satellite networks
- Developing a rural package and expansion of the Digital Strategy Broadband Challenge fund
- Continuing to look at whether additional measures are warranted such as the structural separation of Telecom's retail and lines operations
This website intends to provide some background as to what has happened, what is likely to happen from here, and what this all means. It also outlines Orcon's involvement up to this point, and what we will be doing to ensure that New Zealand gets the best broadband possible, as soon as possible.
What do these terms mean?
LLU (local Loop Unbundling)
LLU is the process of allowing telecommunications providers such as Orcon to use the copper telephone cable that runs from the telephone exchange to the consumer premises. The local loop in New Zealand is currently owned by Telecom.
This means that Orcon will be able to install equipment in telephone exchanges around the country. We will then be able to provide super fast broadband and great services like high quality streaming audio and video.
Naked DSL refers to providers like Orcon being able to offer just DSL services over the telephone network. With naked DSL there would be no requirement for you to have a telephone service on your phone line.
This means that you will be able to have just a DSL connection, and take advantage of Voice Over IP (VOIP) services for making cheap or even free toll calls over the internet.
This is an International Telecommunications Union standard that approximately doubles the bandwidth capacity of standard ADSL. This has the potential to deliver speed of up to 24 Mbps downstream and 3.5 Mbps upstream.
ADSL2+ is currently available in many places around the world, including parts of Australia. LLU means that Orcon will be able to install the technology which will allow New Zealanders access to these much faster speeds.
How has Orcon helped achieve this?
Orcon has been active working with ISPANZ and pushing forward with its own lobbying campaign. We consulted a lot with the Minister and the Ministry of Economic Development during the wholesale review, including being the only provider that recommended the full suite of actions against Telecom - see the table on page 58 of the full Cabinet paper outlining proposed changes. Orcon spent a lot of time preparing and writing submissions for the Government, Commerce Commission and MED to ensure that LLU, unconstrained UBS, Naked DSL and structural separation were all ideas thrown into the mix for the review process.
Orcon has also been involved behind the scenes supporting CallPlus and ihug in their BitStream determination, through letter writing campaigns to both the Minister and the Telecommunications Commissioner. While this was not as high profile as the actions of some of our competitors we felt that behind the scenes lobbying was the effective action for us to take.
We have made some of the key documents that were submitted in the process available for download. See the 'Important Documents' list on the right.
What will Orcon be doing now?
After many months of meeting with MPs from a number of political parties and working with industry interest groups (ISPANZ), Orcon believes the hard work for LLU starts now. There are a number of issues still to be worked out such as tenancy costs (power, rent etc), standard rack design, line rentals, access charges, call out fees, provisioning costs, backhaul and third party access.
The Government has made a bold decision, and we are thrilled about the prospects for the broadband (and the broader telecommunications) market in New Zealand. Orcon's role from this point forward is to ensure that LLU is implemented in a way that makes true competition viable. We don't want to see a great success story turned into a long-winded struggle to work out the details as it has in Australia.
Orcon has already contacted both the Ministry for Economic Development and the Commerce Commission to ensure that they are aware of our desire to be involved in the process. We will keep this site updated with our efforts to ensure that New Zealanders are delivered the best possible broadband connections.
When can I expect to see changes?
Several blogs and news articles have criticized the expected timeframes for any LLU deployment, with a number of customers also calling Orcon and asking when we will be deploying our own ADSL2+ network. Orcon agrees that there is a lot of work is yet to be done, but is hopeful the Government won't waste any time.
Orcon feels that after we see the legislation changes in July there is absolutely no reason why Telecom couldn't deliver unconstrained UBS and Naked DSL within 30 days of that law change. Following on from that we would hope that LLU access seekers can begin placing provisioning requests with Telecom for rack space and backhaul within two months, not the six to seven months currently earmarked.
We also strongly disagree with claims that LLU is bad for provincial and rural communities. We hope to have LLU rollouts in places such as Masterton, New Plymouth, Whangarei, Dunedin and Hamilton. The best way to encourage additional investment in true broadband for provincial areas is for customers to choose Orcon as their ISP.
We will be making announcements about any changes that will be taking place as soon as we can, so keep an eye on the Orcon website.