Final determinations for unbundled local loop

The Commerce Commission has issued its final determinations on the price and non-price terms on which Telecom must make unbundled copper local loop and co-location regulated services available to other telecommunications providers.

The Commission’s determinations are complete commercial arrangements which will allow competitors to take the services from Telecom without the need for any separate agreements.

The local loop is the copper telephone wire that runs from a Telecom telephone exchange to an end-user’s premises. Unbundling of the local loop will allow other telecommunications providers to use Telecom’s copper network to deliver services to their own customers. The associated co-location service allows other providers to put their local loop equipment in Telecom’s exchange buildings.

The final determinations set monthly rental charges for access to the local loop service at $19.84 per month for urban areas and $36.63 per month for non-urban areas. The charge for the transfer of a customer to the UCLL service is set at $74.83.

Telecommunications Commissioner Dr Ross Patterson says the prices in the determinations were set using international benchmarking, as required by the Telecommunications Act. While the Commission has applied the same methodology as it used in its July draft determination, the monthly loop prices are higher as some additional relevant prices were benchmarked in the final determination.

The determination contains a 15 month implementation plan commencing from the determination date. This will involve a soft launch at up to 15 exchanges during January to April 2008, and up to 15 further exchanges per quarter for the next year. This would result in up to 75 unbundled exchanges by April 2009.

Dr Patterson says local loop unbundling changed the competitive landscape in a number of OECD countries. “We expect to see the same results in New Zealand, where consumers will benefit from better prices, greater choice, and access to more innovative products.”

The UCLL determination requires Telecom to provide forecasts and notice to telecommunications providers of any planned replacement of copper local loops from the exchange by fibre to the cabinet (cabinetisation). This will allow telecommunications providers to invest with confidence, without impeding Telecom from deploying more fibre in the network.

“I would like to thank all industry players for the spirit of cooperation which enabled the Commission to reach pragmatic solutions in relation to the non-price terms for access, and record the Commission’s appreciation of the work done by the Telecommunications Carriers Forum in this regard,” says Dr Patterson.
The Commission’s determinations can be found on its web site www.comcom.govt.nz  

Unbundled Local loop reports and documents