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The government has bent over backwards to accommodate Telecom's "right" to exploit its monopoly on the PSTN and the follow-on monopoly that this provides in the area of DSL broadband delivery.

Rather than forcing it to unbundle the local loop, the government in its infinite wisdom and despite the very vocal protests of many NZers, has allowed Telecom to retain its vise-like grip on its most prized asset.

We (consumers and the industry) were told that in return for allowing Telecom to retain its monopoly position, the government had made sure that there would be competition in the provision of DSL broadband by way of a wholesale-level service to be known as the Unbundled Bit Stream service. (UBS).

Of the more intelligent observers quickly noted that this was a ridiculously slow and limited service that barely qualified as broadband and, when compared to the levels of affordable service available to our peers overseas, was really quite pitiful.

Then, when they discovered that some of those to who it would be selling the UBS service planned to offer deals that undercut its own lacklustre JetSurf plans, Telecom turned around and imposed draconian constraints on how those competitors could promote their UBS-based offerings.

As if that wasn't alone wasn't a truly anti-competitive action, they also mandated a "churn fee" that effectively penalised every ISP (*except* Telecom) who offered a deal competitive enough to lure away customers from a competitor.

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When asked why Telecom have been allowed to thumb their nose at the spirit of the deal with government that allowed them to keep their monopoly status, all we've been told is that "Telecom is on notice" to act properly and perform.

Well if Friday's little bombshell from Telecom Towers isn't enough to spur the government into rethinking its decision not to force unbundling then something really stinks in the halls of parliament.

I'm referring of course to the new DSL plans announced by Telecom which utterly and absolutely gut any viability that the UBS might have once had as a wholesale product.

Here's a comparison for you:

JetStream Surf Flat Rate (UBS-level service):
Speed: 256/128
Data cap: unlimited (speed-limited @10GB)
Price: $69.95

Xtra JetStream Plus:
Speed: 2Mb/192K
Data cap: unlimited (speed-limited @10GB)
Price: $69.95

Now excuse me -- but *why* would anyone bother with a paltry 256/128Kbps UBS-based service from a Telecom competitor when, for exactly the same money, they could get a 2Mbs/192Kbps *Telecom* service?

Of course these new much *faster* services are not part of the UBS deal negotiated by government in return for allowing Telecom to retain its local loop monopoly.

Other ISPs will be allowed to re-sell them, but the margins involved are reportedly so low as to make it little more than a joke and the ISP has no control over data traffic limits or any of the other flexibility that UBS was to provide.

Surely by now, the government must realise that they're being made a laughing stock and that they've been taken for one hell of a ride by Telecom.

How can a group of such supposedly savvy people have been so massively duped into believing that Telecom would actually play fair and allow any *real* competition -- for to do so would negate the value of their prized possession -- the local loop.

The way I see it, if our government can't avoid being duped by a group of suits running a telco, how on earth can we be expected to believe that the massive amount of money being poured into a national superanuation fund won't also be conned out of their hands.

Just who's side are this (and the previous) government on?

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