ComCom rules on fast broadband

The Commerce Commission has ruled that Telecom Wholesale can charge a premium for VDSL, on the condition that it supplies it at the same price to all ISPs.

VDSL enables faster broadband speed of up to 40Mbps, although in trials conducted by Telecom Wholesale the speeds recorded have been 23Mbps down and 7Mbps up. In addition, users need to be located with 1km of the exchange or cabinet. This compares with ADSL2+ services which provide maximum speeds of 24Mbps to users located within 2.5kms of an exchange or cabinet.

The Commerce Commission sets the price for the regulated service – that is the price that Telecom Wholesale can charge to supply a broadband service which is then resold by ISPs such as Orcon, Vodafone and CallPlus as well as Telecom Retail. The Commission has now ruled that Telecom Wholesale is not compelled to supply VDSL services, but if it chooses to do so it can set its own price on condition that every ISP pays the same amount.

Telecommunications Commissioner Ross Patterson explains the Commission’s position in the statement released today: “The Commission’s view is that Telecom should be allowed to offer, on a commercial basis, new wholesale broadband services that are not currently regulated, provided Telecom offers the new VDSL services to other telecommunications companies on the same terms as to Telecom’s retail units and to the same equivalence standards as applies to the regulated services,” he says.

“VDSL is an emerging technology which is capable of delivering significant benefits to consumers such as increased speeds and facilitation of the development of innovative new services. It is important that incentives for investment in new DSL technologies such as this are preserved, so that consumers are able to receive the benefits associated with such innovations.”

Telecom Wholesale has yet to release the VDSL service commercially. However TelstraClear currently offers a retail VDSL service.