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How long are the government going to be a pawn in Telecom's game of "own the DSL market" while competing ISPs are increasingly relegated to the role of commissioned sales agents?

Let's quickly recap the situation to date:

The CC, in a preliminary finding, says "we think the local loop should be unbunlded so as to introduce some real competition in the DSL marketplace"

Telecom says "no, there's no need to do that, we'll create a UBS that will see everyone competing on a level playing field and we'll have it up and running by the end of September."

The CC says "what a sterling idea, and you're right, there's no need to force unbundling of the loop now because you're such a fair-minded player"

Players on that "level field" start designing and promoting very competitive products that eclipse Telecom's own Xtra offering in scope and value.

Telecom sees this and says "No, no, no -- you can't do that! You can't play on *our* field if you're going to play better than us and offer more attractive deals"

The CC does *nothing*.

September 30 comes and goes and there's no sign of the promised UBS service despite Telecom's earlier commitment. "Sorry, we're experiencing technical difficulties" they tell the CC, who swallow that claim hook, line and sinker.

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Meanwhile, Telecom continues to heavily promote its own retail (Xtra) DSL-based offerings in an attempt to sign up as large a share of the market as it can before it finally introduces UBS.

Other ISPs continue to prepare for the (eventual) release of the UBS service only to find, to their shock and horror, that Telecom then comes out and says:

"Guess what? Despite the fact we're so technically incompetent that we can't honour our commitment to get UBS running by September 30, we've just found that we can now offer consumers a 2Mbs DSL service for the same price as all those other ISPs will charge you for a UBS-based 256Kbps service"

Right now you're probably thinking: "surely the CC, given its defined role, must come down on Telecom like a tonne of bricks for obviously abusing its monopoly and making a complete joke of the UBS and its goal of introducing true competition".

Surely Telecom has now shown its contempt for the spirit of the commitments it's supposed to have entered into and the CC will review its decision not to demand unbundling of the loop right?

No, I'm sorry -- because this is where the unbelievable becomes the totally incredulous.

The CC actually released a statement in which it says "Telecom is meeting its commitment to offer its Unbundled Partial Circuits (UPCs) consistent with internationally benchmarked cost based pricing and therefore does not consider it necessary at this time to launch a further Schedule 3 investigation into unbundling the fixed Public Data Network"

So where does this leave all the other NZ ISPs and the prospect of real competition in the DSL broadband marketplace?

Exactly where it was several months ago before this whole fiasco began.

Yes, prices are lower than they were -- but there's still only one dominant player and that's Telecom.

Yes, Telecom still "owns" the DSL broadband marketplace and that means they have full control over services (such as VOIP, gaming, etc) can and can't be used by NZ Net users.

In the wake of these events it is plainly obvious that Telecom will have no hesitation in abusing that dominance again in future to ensure that it is able to defuse any and all threats while also protecting its other core services (such as toll traffic).

But we should not blame Telecom any more than you'd blame a wild animal for attacking and killing its prey for food -- it's simply the nature of the beast.

What we should be asking, clearly, loudly and repeatedly, is why the government is allowed to perpetrate such a fraud on the NZ consumer by claiming that the CC is anything more than a subsidiary of Telecom NZ Ltd.

If The Commerce Commission, Paul Swain, or anyone in government can come up with a reasonable explanation for this outrageous situation, they're more than welcome to post in the Aardvark Forums or send me a right of reply.

If we hear nothing then I guess my suspicions will be confirmed.

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