The Commerce Commission says it is to issue proceedings alleging a failure by Telecom to provide a service to other companies caused serious harm to competition in telecommunications markets and reduced the financial feasibility of unbundling local exchanges.
The commission today said the allegation was that Telecom failed to provide other telecommunications service providers with unbundled bitstream access (UBA) in conjunction with the sub-loop extension service (SLES), when it provided an equivalent service to its own retail business.
The UBA/SLES service was intended to allow other telecommunications companies to provide their own voice services from unbundled exchanges in conjunction with a Telecom broadband service from a roadside cabinet.
The UBA service allows telecommunications companies to supply broadband services to retail customers without the need to replicate Telecom's copper local loop. SLES is the copper connection between a local exchange and a roadside cabinet.
The commission said it considered Telecom's failure to provide the UBA/SLES service to other telecommunications companies while providing it to its own retail business had caused serious harm to competition in telecommunications markets.
It considered the failure also deterred efficient investment by other companies in telecommunications infrastructure, and resulted in significant commercial gain to Telecom.
"Telecom's failure to provide this service has reduced the financial feasibility of unbundling local exchanges, reduced the extent of unbundling, and consequently reduced the extent of retail competition," Telecommunications Commissioner Ross Patterson said.
