Rules for Unbundling
2006 - 2008
In December 2006, new legislation fundamentally
changed the shape and direction of New Zealand's telecommunications
Under the new regime, Telecom is required
to split into three business units - fixed network access,
wholesale, and retail - each operating at arms length, with
separate financial reporting. Telecom's separation plan must
also ensure transparency and equivalence.
In addition, access to Telecom's local loop
network is to be 'unbundled'. In practice, this means that
non-Telecom service providers will be able to:
Install and operate their own broadband
equipment inside Telecom's exchanges and roadside cabinet,
connecting directly to customers' lines;
Sell to their customers Telecom's broadband
services without requiring their customer to also buy Telecom
calling or local access services;
Install and operate their own transmission
lines from Telecom roadside cabinets to Telecom exchanges,
and from Telecom exchanges to their own network; and
Use Telecom's transmission lines from
Telecom roadside cabinets to Telecom exchanges, and from
Telecom exchanges to their own network.
In consultation with the Government, the
Carriers' Forum (TCF) and other industry participants
established, under the TCF's rules, two working parties to
develop, in a two-stage process, codes of practice covering
technical and operational standards for the implementation
of 'local loop unbundling' and 'naked DSL' in New Zealand.
This project commenced in September 2006.
It was intended that
industry agreement on these non-price terms would be turned
into codes that would:
Form the basis of any commercial offers
presented by the access provider to access seekers in the
case of bilateral issues (such as forecasting and provisioning
Become an enforceable multilateral code
in the case of multilateral issues (such as interference
Pricing, detailed design, and implementation
were excluded from the project.
As independent chair
and project leader, Tony's role is to frame and focus the
process, distil key issues and options, and facilitate industry
agreement on technical and operational rules relating to unbundling.
Tony is also responsible for briefing the
Commerce Commission, media, and other interested parties on
For Phase 1, Tony recommended a workshop
approach, which was adopted and delivered successful outcomes.
Phase 1 objectives
In phase one (September to December 2006),
the working parties were required by their terms of reference
to prepare a report that (among other things):
Identifies the scope and depth of work
Specifies relevant technical, operational
and business requirements;
Provides a high-level draft design brief,
consistent with standard access principles in the legislation;
Draws on overseas experience, utilising
members' internal expertise, and adapting that experience
to the New Zealand environment.
Phase 1 outcomes
The TCF achieved the goals outlined above,
and reached unanimous agreement on the main LLU elements relating
to 'physical interface' and operational service standards
at a high level.
Until early 2007, the Commission participated
in this project as an observer.
However, in late February 2007, the Commission
invoked its powers under the new legislation to regulate 'local
loop unbundling' and 'naked DSL' services.
Under the standard terms determination (STD)
process, the Commission can prescribe the terms and conditions
on which Telecom must supply a 'designated access' or 'specified
service' to all access seekers. The STD process is summarised
by the Commission in an overview
The Commission's commencement of STD processes
in late February 2007 effectively displaced phase two of the
TCF's project to develop codes of practice for LLU and 'naked
DSL' services. However, TCF members decided to keep working
together, with a view to reaching industry agreement on key
technical and operational issues.
The Commission supports this approach by
requiring Telecom to include in its STD proposals "all
non-price terms of supply that have been unanimously agreed
to by the relevant TCF working parties".
Phase 2 objectives
Since mid-March 2007, the TCF working parties'
goals have been to:
Distil industry views precisely;
Seek to reach agreement in a timely manner
on key (priority) issues;
Document what has been agreed, and (where
agreement has not been achieved) the nature and degree of
any disagreement; and
Prepare TCF submissions to the Commerce
Pricing, detailed design, and implementation
are still outside the working parties' terms of reference.
Further details on the phase two scope of work are set out
in the TCF's
Extension to Project Scope.
Phase 2 outcomes
Within the Commission's tight timeframe,
the TCF working parties have achieved their goals. Unanimous
agreement has been reached on key issues relating to:
Access to unbundled
local loop lines and colocation of LLU equipment. Details
of this agreement are set out in the TCF's
LLU Recommendations, which have been agreed by all TCF
members. These elements were included in Telecom's STD proposals
relating to unbundled lines access and colocation, which
was filed with the Commission on 12 June 2007; and
Access to 'naked DSL' services. Details
of this agreement are set out in the TCFs
UBA Recommendations, which have been agreed by all TCF
members. These elements are to be included in Telecom's
STD proposal, which was filed with the Commission on 11
for unbundled bitstream access (UBA) and unbundled copper
local loop (UCLL), which are to be regulated by the
Commerce Commission. Details of this agreement are set out
in the TCF’s
Backhaul Recommendations, which have been agreed by
all TCF members. These elements are to be included in Telecom's
STD proposal, which was filed with the Commission on 28
Interference management rules for UBA
and UCLL, which are to be regulated by the Commerce Commission.
Details of this agreement are set out in the TCF’s
IMP Issue Assessment, which was submitted to the Commission
on 24 October 2007. It is likely that these elements will
be included in the Commission’s STD for UBA and UCLL.
In December 2007, the TCF formed working
parties to address unbundling at a sub-loop level, in particular:
Sub-loop and sub-loop co-location unbundling
Wholesale cabinet-delivered DSL services
Sub-loop services were specifically excluded
from the Telecom Unbundled Copper Local Loop Network (UCLL)
and UCLL Co-location Service STDs.
The aim of these TCF working parties is
to provide input into:
Telecom’s Standard Terms Proposals
(STPs) in relation to the sub-loop services; and
Telecom’s service development process
for Wholesale’s cabinet-based DSL services (in addition
to the current regulated UBA services) and Telecom’s
soon to be established Access Network Services unit’s
(ANS) UCLL related services.
Phase 3 outcomes
Within the Commission’s timeframe,
the Working Party achieved its goals: