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Transtasman Telecom turns Jekyll & Hyde on local loop

By Rob Hosking

Friday 30th June 2000

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Telecom and its Australian carrier AAPT are at odds on unbundling the local copper network depending on which side of the Tasman they are on.

The two companies have taken different positions on making the incumbent telecommunications carrier open up its local copper network to competitors.

On one hand such an approach is described as "extremely difficult and costly" by Telecom. On the other each part of the incumbent telecommunications carrier's local network should be "broken down and every element should be declared separately," AAPT said.

Since Telecom effectively owns Australian carrier AAPT it is essentially the same company arguing different sides.

On this side of the Tasman, Telecom is the incumbent, and has resolutely set its face against any requirement to open it up or to regulate it to make life easier for its competitors.

In Australia, AAPT - 80% owned by Telecom and regarded now as a virtual subsidiary - is one of the most gung-ho pro regulators in the market.

And the Telstra submission to the New Zealand telecommunications claims that because of this, "Telecom New Zealand is a direct beneficiary of the value transfer from Telstra to its competitors under the Australian regime."

It is not only on the question of the local loop that Telecom has two positions. Telecom told the telecommunications inquiry that requiring carriers to allow roaming for mobile phones would create investment distortions for existing and new networks. Across the Tasman, AAPT is arguing for making roaming mandatory.

And on information disclosure - which was imposed on Telecom last year - the company is opposed.

"The benefits of the information disclosure regime are unproven, while the costs are readily apparent ... the value of a continued information disclosure regime must be seriously considered," Telecom's submission to the inquiry claims.

AAPT has argued in favour of a fairly rigorous regime in which Telstra, the Australian incumbent, would have to separate its business divisions to ensure greater transparency.

Telecom has defended this apparently Janus-faced approach to regulatory behaviour. "It's a different company, a different regulatory regime - at the moment anyway - and AAPT is at a different stage in its life cycle," Telecom spokeswoman Linda Sanders said.

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