The Commerce Commission today released the findings of its annual competition review of backhaul services for the unbundled copper local loop (UCLL), unbundled copper low frequency (UCLF) and unbundled bitstream access (UBA).

Backhaul services provide telecommunications companies with access to transmission capacity from local and regional exchanges, allowing them to provide communications services, such as voice and broadband.

The review shows a marked increase in the number of backhaul links that are now subject to competition and therefore no longer need to be regulated. 95% of all regional backhaul links are now competitive, and around 75% of the relevant local backhaul links.

“The increase in competition is mostly due to the separation of Telecom in November last year. At that time, Chorus and Telecom split the spare fibres on backhaul links so there was an immediate jump in competition for those links,” said Dr Stephen Gale, Telecommunications Commissioner.

“We have also seen continued investment in backhaul by other telecommunications companies.”

This was the fourth competition review of UCLL backhaul links and the second competition review of UBA backhaul links, conducted under section 30R of the Telecommunications Act.

You can find the review on the Commission's website at
www.comcom.govt.nz/competition-review-of-uba-backhaul-and-ucll-backhaul-markets

Background

In June 2008, the Commission released the UCLL and UBA backhaul Standard Terms Determination (STD), which set out which backhaul routes were subject to regulation, as well as the terms and conditions governing the supply by Telecom, now Chorus of the backhaul service on those routes.

When the STDs were introduced, only 37 out of the 57 relevant local and 22 out of 38 regional UCLL backhaul links were competitive. None of the UBA backhaul links were competitive. This compares to today’s results with 171 out of 215 local and 36 out of 38 regional UCLL and UCLF backhaul links being competitive. 42 out of 62 local and 36 out of 38 regional UBA backhaul links are now competitive.

As there are similarities between the UCLL, UCLF and UBA backhaul services, the Commission indicated in March 2011 that a combined review process would be undertaken for both in the future.

Unbundled copper local loop (UCLL) refers to the service that enables access to, and interconnection with, Chorus's copper local loop network. It allows telecommunications companies to supply voice and broadband services to retail customers using their own equipment over Chorus's local loop.

Previous reviews of UCLL backhaul links were published on 30 April 2009 (Decision 667), 3 December 2009 (Decision 686), and 9 March 2011 (Decision 706). The reviews are on the Commission's website at www.comcom.govt.nz/unbundled-copper-local-loop-backhaul-service

Unbundled bitstream access (UBA) allows other telecommunications companies to supply broadband services to customers without the need to replicate Chorus's local loop.

One previous review of UBA backhaul links was published on 23 March 2011 on the Commission's website at www.comcom.govt.nz/unbundled-copper-local-loop-backhaul-service/

Unbundled copper low frequency (UCLF) service enables telecommunications companies to have access to the low frequency portion (the frequency band between 300 and 3400Hz) of the UCLL network. When telecommunications companies have this service they can supply voice services to retail customers without the need to replicate Chorus’ local loop.

Local (or primary) links are those between a local exchange and a main exchange (point of interconnect), where a telecommunications company may interconnect.

Regional (or secondary) links are those between main exchanges (point of interconnect).