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TelstraClear no competition for Telecom

Friday 6th August 2010

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TelstraClear provides no meaningful competition to Telecom in the wholesale backhaul market, according to the Commerce Commission.

Telecom had tried to convince the regulator that TelstraClear’s 6,000 kilometres of fibre and the company’s vertical integration posed a competitive constraint on the local phone company’s unbundled copper local loop backhaul services. Proof of a competitor may have helped Telecom avoid regulation in backhaul. 

The commission said the Telstra unit wasn’t a threat to Telecom in that market, according to a draft review of UCLL backhaul services, which was released today.

Backhaul services give Telecom’s rivals access to transmission routes between the phone company’s local exchanges and their networks and let them provide landline and broadband services.

The draft review does propose removing two Telecom exchanges from regulation, while introducing 25 new links that had been unbundled since the Commerce Commission’s last review. The regulator decided to regulate backhaul services in May last year, after a review found several routes to be uncompetitive.

The commission is calling for submissions on the review until August 13 and the draft on UBA backhaul due later this month.

Shares in Telecom and Telstra were both unchanged at $2.02 and $4.20 respectively.

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