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The difference between countries with effective regulators and those where the encumbent telco is allowed free reign to leverage their monopoly with little intervention is significant.

An example cited shows that in the UK (which has strong regulation) the average investment per head of population by Telcos is around US$184 but, in Germany (where regulations are lax or non-existent), that spend drops to just US$68.

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Here in New Zealand, we have seen lots of talk but very little action from the Commerce Commission and Telecommunications Ombudsman.

Almost every second day, Telecom is put "on notice" or given some kind of final warning over its monopolistic attitudes and policies -- but the amount of actual regulation is minimal.

As a result, and despite the government's oft-repeated goal of having NZ near the top of the OECD list in terms of broadband connectivity, we're still lagging well behind in terms of the speed, uptake and price of our broadband services.

When given the chance to completely open-up the broadband market and significantly increase the range and variety of services on offer by forcing Telecom to unbundle the local loop, the government and regulators faltered -- preferring to wimp out and take the easy option.

This choice appears to have disadvantaged consumers, and I'm not just talking about prices.

Last week, Telecom's DSL network had a major outage that affected parts of the country for most of the day. Since all competing DSL providers have to use Telecom's own network and hardware, this means that in the event of a major failure, chances are very high that all competing services will be knocked out at the same time.

This leaves little opportunity for a competitor to Telecom to carve a niche by offering higher levels of service and a guarantee off less downtime -- a feature I'm sure many would gladly pay for or which would be a major factor in the decision-making process.

Right now, NZ's copper-based broadband service is in the hands of a single player and even a relatively small failure could see parts of the country disconnected from the Net for protracted periods. This is yet another downside of not unbundling the local loop.

On the other side of the coin however, the present arrangement has allowed virtually all ISPs to get on the DSL bandwagon and offer the service to their customers. To do so, they haven't had to install expensive hardware in Telecom exchanges -- just resell the encumbent's offering.

But what do you think? Has not forcing local loop unbundling been a success?

Are we better off now than we would have been if the LL had been unbundled or do we potentially have all our eggs in one basket as far as the reliability and robustness of our DSL network is concerned?

Tell us all and see what others have to say in The Aardvark Forums

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