Reply to Rodney Hide’s loop unbundling comments

What follows is my reply to Rodney Hides post about Local Loop unbundling. You can find his post here.

Rodney hide spouts some absolutely worthless rubbish at the moment. Unfortunately, his site won’t let me comment without being registered, and when I try to register it keeps failing me regardless of the “screen name” I use. So I’m going to post this here and if he reads it or not I leave to the ether.

Sorry, but I thought you were smarter than that Mr Hide. Are you honestly suggesting that Telecom’s continuing monopoly of the telecommunications industry in New Zealand is a good thing? Especially when its not a monopoly they earned, but instead inherited.

As a small business owner trying to survive, I find it absolutely abhorent that the cost of Internet access in New Zealand is so extremely high. Look to the UK and Australia for examples of how unbundling the loop has actually improved competition and benefitted the consumer immediately.

Your suggestion that forcing Telecom to wholesale access to the loop is like the government forcing farmers to allow unrestricted access is completely wrong and misleading. It shows a complete misunderstanding on your part of the issues involved.

The better (and more widely accepted) argument is not that Telecom sell it to the government, but that they create a new division or company that wholesales the line access to everyone (Telecom and Xtra included) at a fair market price. An example of this is how it has been implemented by Telstra in Australia and by British Telecom in the UK. Do some background homework.

Mr Hide, actually take the time to learn about the industry and the issue surrounding the issue before you start mouthing off like this. You’re liable to lose the respect of voters such as myself and many of my friends who are actually involved in the ICT industry.

Update: Wouldn’t you know it? I post this and then I can register on his blog. So I’ve reposted this as a comment on his site as well.

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This entry was posted by Steve on 27 December, 2005 at 2:39 pm, and is filed under Uncategorized. Follow any responses to this post through RSS 2.0. You can leave a response or trackback from your own site.

Mike

Go! Steve Go!

That guy seems to be a schmuck. I have to deal with those sort of issues here in Buffalo.
Mike

Go! Steve Go!That guy seems to be a schmuck. I have to deal with those sort of issues here in Buffalo.
Nigel Kearney

You’re missing the point and thinking like a leftist. Assets don’t just exist in a vacuum and you then consider how to fairly distribute them. First, assets have to be created, and the way they can be legally used affects whether they are created at all.

Telecom did ‘inherit’ the network although they had to pay for it. But the part that is proposed to be stolen by regulation includes what has been added since Telecom was privatized.

It’s expensive to create a telecommunications network. If a company pays the cost of developing or buying such a network, why should they then have to share it with their competitors who paid nothing for the development?

By forcing Telecom to charge their own Internet provider the same as their competitors, you prevent them recouping the cost of their investment.

The end result will be that Telecom and other firms will cease to invest in expensive long-term development of networks because they know the government will take it off them once it starts to earn money. Then the government will use the lack of infrastructure development as an excuse to start nationalizing it again.

A similar thing is now happening with power generation.

The bottom line is that, if Telecom overcharges for the use of its network, competitors will be motivated to create their own networks. With wireless technology this will become increasingly easy. If those competitors prefer to buy from Telecom then, by definition, they are paying a ‘fair market price’.
Nigel Kearney

You’re missing the point and thinking like a leftist. Assets don’t just exist in a vacuum and you then consider how to fairly distribute them. First, assets have to be created, and the way they can be legally used affects whether they are created at all. Telecom did ‘inherit’ the network although they had to pay for it. But the part that is proposed to be stolen by regulation includes what has been added since Telecom was privatized.It’s expensive to create a telecommunications network. If a company pays the cost of developing or buying such a network, why should they then have to share it with their competitors who paid nothing for the development?By forcing Telecom to charge their own Internet provider the same as their competitors, you prevent them recouping the cost of their investment.The end result will be that Telecom and other firms will cease to invest in expensive long-term development of networks because they know the government will take it off them once it starts to earn money. Then the government will use the lack of infrastructure development as an excuse to start nationalizing it again. A similar thing is now happening with power generation.The bottom line is that, if Telecom overcharges for the use of its network, competitors will be motivated to create their own networks. With wireless technology this will become increasingly easy. If those competitors prefer to buy from Telecom then, by definition, they are paying a ‘fair market price’.
Steve

“The bottom line is that, if Telecom overcharges for the use of its network, competitors will be motivated to create their own networks.”

Yes, like TelstraSaturn did in Kapiti, but then was unable to successfully repeat outside of that area because of the roadblocks from TelecomNZ as well as that stupid Resource Management Act. Apparently ripping up the streets for a new power network is fine, but not for a new communications network. Even though both are equally important.

I’m not thinking like a leftist. I’m thinking like someone that had a new product shut out of the market because the product competed directly with TelecomNZ and TelecomNZ would only allow access to the network at such an impossibly high rate that it would have been impossible for the product to become profitable in this country.

I can’t stand monopolies. Especially ones that abuse their market position. If TelecomNZ was forced to play on the same field as everyone else, they’d not be anywhere near as successful as they have been. Their running of AAPT in Australia is a good example of that.

I’ve said a lot about this on the thread at Rodney’s blog (User Steve C). I’ll let my comments there stand instead of repeating them here.
Steve

“The bottom line is that, if Telecom overcharges for the use of its network, competitors will be motivated to create their own networks.”Yes, like TelstraSaturn did in Kapiti, but then was unable to successfully repeat outside of that area because of the roadblocks from TelecomNZ as well as that stupid Resource Management Act. Apparently ripping up the streets for a new power network is fine, but not for a new communications network. Even though both are equally important.I’m not thinking like a leftist. I’m thinking like someone that had a new product shut out of the market because the product competed directly with TelecomNZ and TelecomNZ would only allow access to the network at such an impossibly high rate that it would have been impossible for the product to become profitable in this country.I can’t stand monopolies. Especially ones that abuse their market position. If TelecomNZ was forced to play on the same field as everyone else, they’d not be anywhere near as successful as they have been. Their running of AAPT in Australia is a good example of that.I’ve said a lot about this on the thread at Rodney’s blog (User Steve C). I’ll let my comments there stand instead of repeating them here.

Reply to Rodney Hide’s loop unbundling comments

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