In a TUANZ “After 5s” session in Wellington on Monday, March 21st, both the MED and Telecom came out to talk about the proposed Telecom/Vodafone RBI solution. One of the points made by Telecom is that while all new RBI fibre would be available to all comers as dark fibre, existing Telecom fibre would be restricted to “layer 2” wholesale services. Telecom says that their older fibre may not have enough cores for other users, may not have break-out pits in the right place, and really was only ever intended for use by Telecom.
Access to inexpensive dark fibre in rural New Zealand is a huge issue for alternative telecommunications providers. Rural areas are not large enough to support natural competition. The requirement for an alternative provider to purchase wholesale L2 services from an incumbent is enough to keep them out – either due to slow/no service provision or predatory pricing.
The diagram below roughly lays out a bit of central Hawkes Bay. It shows existing fibre assets owned by Telecom (blue), TelstraClear (orange), and FX Networks (red). Rural towns that will get new fibre include Elsthorpe, Omakere, and Porangahau. Rural radio towers likely to get fibre are also shown.
Green lines indicate new fibre to be funded by the RBI – fibre which will be available dark or lit.
The colored squares at the right hand of each location show the competitive services likely to be available after the completion of the RBI rollout.
As Telecom has existing fibre from Otane towards Elsthorpe, and Waipukurau towards Porongahau, the new RBI fibre to Eslthorpe and Porongahau is unlikely to be connected all the way back to Waipukurau. This means effective competition may only exist for Omakere. It also means that three of the four cellular towers in the area will miss out on the ability to take a dark fibre service connecting them to FX Networks or TelstraClear – a huge blow to any provider other than Telecom, or Telecom’s largest customer, Vodafone.
Negotiations between the government and carriers Telecom and Vodafone have not yet been completed. Now is the time to ensure the solution is one that will provide for real competition in rural markets.