The Government is getting its broadband policy in order and
has done a good job of balancing the interests of everyone,
information technology, telecommunications and consumer
market intelligence provider IDC says.
The Government's telecommunications review document signalled
a more direct role in setting the broadband prices New
Zealanders paid, IDC New Zealand research manager Peter Wise
''Many look back and wish the Government had invested in
better public transport during the sixties and seventies, but
at the time, such investments were deemed unnecessary or too
''The Government is taking the equivalent of that investment
step in fibre now and ensuring New Zealand is well set up to
achieve the economic benefits and provide new services that
advanced broadband enables,'' Mr Wise said.
The discussion document outlined the Government's proposed
approach to reviewing the telecommunications regulatory
environment, he said.
The review had been split into two stages, with the first
addressing the issue of wholesale pricing in the market.
The review's second stage, set for some time in the future,
would address fibre demand and migration challenges.
The Commerce Commission's announcement last December of a
draft unbundled bitstream access (UBA) price of $8.93 exposed
a ''gaping hole'' in the Government's broadband policy, Mr
It would have resulted in lower wholesale prices for copper
and potentially lower broadband and voice retail prices that
could undermine the Government's investment in fibre.
''Our international research shows that relative pricing at a
retail level is a major factor impacting [on] successful
Copper and fibre wholesale prices were similar and resulted
in relatively similar retail prices, he said.
The commission's draft decision for pricing might have
resulted in a wholesale price decrease of $12.53 per
broadband line per month - wiping up to $160 million off the
bottom line of Chorus and transferring that to retail
companies such as Telecom, Vodafone and other players like
Slingshot and Snap Internet.
''This may in turn have passed through to lower retail prices
for end users but it also had the potential to wreck the
fibre roll-out initiative.''
The Government's discussion document put forward a pricing
structure that would result in a smaller discount to
wholesale copper prices, down from the current $44.98 to a
range of between $37.50 and $42.50.
That brought the prices into line with the basic introductory
fibre wholesale price, Mr Wise said.
IDC senior analyst Glen Saunders said all retail service
providers were likely to be faced with a more financially
attractive solution than they had now and Chorus was faced
with a much lower impact on its bottom line.