Commission probes Telecom New Zealand

As Telecom New Zealand builds up to the launch of its digital subscriber line (DSL) high-speed Internet access service, it is being investigated by the Commerce Commission following a complaint of anticompetitive behaviour by a DSL rival.

The commission has determined that the complaint, laid by Hamilton-based ISP (Internet service provider) Lloyd Group over a month ago, is worthy of investigation. The small company beat Telecom to the punch by signing a commercial DSL customer in Auckland at the start of the year.

However, since then it claims it's been unable to connect any further DSL customers because circuits provided to it by Telecom have been conditioned to limit them to a data rate of 9.6Kbit/sec. The variant of DSL being implemented by Lloyd Group, multiple virtual lines (MVL), has a potential speed of 768Kbit/sec.

Telecom maintains the A1 analog circuits sought by Lloyd Group are suitable only for voice use, not high-speed data.

Lloyd Group co-founder Daniel Lee, who says he isn't holding his breath for a speedy resolution of the matter, says Telecom is using essentially the same kind of circuit in its own DSL trial. Telecom is testing DSL gear of a different kind from that used by Lloyd Group with more than 300 Internet subscribers in Auckland, Wellington and Christchurch.

Telecom future technology manager, Graeme Rowe, concedes the residential lines its trial is running over were also originally designed for voiceband use. He says, however, that "new equipment with strict design rules about where it can and can't be used" is allowing provision of new services over those lines.

Rowe says the limiting of A1 circuits to 9.6Kbit/sec is a technical issue, not a competitive one.

"We want to open up the ADSL market, certainly at the modem end, but not necessarily from the exchange end, because that's a little bit harder to determine what is and isn't appropriate," he said. "ADSL and its variants are an exchange-fed proposition."

Rowe says the MVL gear which Lloyd Group is using to provide service to its Auckland customer could be having a disruptive effect on the Telecom network but that it could take months for Telecom to establish that.

He added that Telecom is close to launching its DSL service.

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