New Zealand local loop unbundled

December 13, 2006

The New Zealand government has announced that the Telecommunications Amendment Bill, which will make Telecom unbundle the 'local loop', has passed in parliament only six months after it was introduced. The bill was passed under urgency on the last sitting day of the year.

The bill was opposed by two members of parliament from the ACT party and supported by 119 votes. The ACT party voted against the bill to prevent a split of the company into three divisions: retail, business and network.

Unbundling the local loop means that Telecom, New Zealand's telecommunications monopoly company, will open its lines to competitors and provide "naked DSL", which some say will lead to equal and fair competition in the Internet sector. The decision to unbundle the local loop occurred earlier this year when a mole leaked the proposal and the government had to make the announcement earlier than planned.

The bill will also enable minister of communications Cunliffe and the Commerce Commission the powers to split Telecom into the three divisions, after public consultation. The Telecommunications Commissioner will also have more power to implement the changes and monitor the implementation.

The bill will ensure that consumers do not have to purchase a phone account when signing up for an Internet account; before the bill was passed, a NZ$10 fee was added to the bill if the phone account was not with the Internet service provider.

The Honourable David Cunliffe, minister of communications, said that "We now have a clear, firm mandate from the people of New Zealand. Kiwis are demanding fast, 'all you can eat' broadband, which this legislation is designed to deliver."

Hon Cunliffe said that history has been made with the new bill as it will bring New Zealanders faster and better broadband. "What some people said couldn't be done is being done. What some people said wouldn't work is being given the opportunity to work with an overwhelming majority. The bill equips New Zealand for the new digital age— an age where the smart use of technology will determine our continued prosperity as a country and make economic transformation a reality."