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Commerce Commission clears backhaul deregulation

A Commerce Commission report has found that increased competition in backhaul exchanges means they can now be deregulated

A Commerce Commission report on New Zealand's unbundled copper local loop (UCLL) and unbundled bitstream access (UBA) has found that increased competition in backhaul exchanges means they can now be deregulated.

Backhaul links allow telcos to access transmission capacity from local and regional exchanges, which is used to provide services such as voice or internet.

The annual report released today found that 95 percent of all regional backhaul links, and around 75 percent of local backhaul links are now competitive.

In 2008, when the ComCom first determined which backhaul routes were subject to regulation and the terms of service for Telecom (now Chorus), only 58 percent of regional UCLL links, and 65 percent of local UCLL links were deemed competitive. None of the UBA links were competitive at that time, says the ComCom.

Stephen Gale, the Telecommunications Commissioner, says that increased competition is mostly a result of the Telecom Chorus demerger in November last year.

"At that time, Chorus and telecom split the spare fibres on backhaul links so there was an immediate jump in competition for those links," says Gale.

Investment in backhaul by other telcos has also raised competition, he says.

The full report can be downloaded at: www.comcom.govt.nz/competition-review-of-uba-backhaul-and-ucll-backhaul-markets

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