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LLU price range

July 30th, 2007 at 9:42 am by David Farrar

The Dom Post predicts the Commerce Commission is going to set the LLU access price at between $20 and $30.  This is a nonsense range to predict (and interesting their headline does not match their story).

We already have a price for unbundled bitstream access (which means ISPs use Telecom’s Dslams rather than install their owns) of $26.35. Any price greater than that would be an economic nonsense saying it costs more to not use Telecom’s equipment than it does to use it.

LLU will be uneconomic for many if the price is not $25 or below. On the other hand if it is below $20 then there could be concerns that this is not enough to of a return on capital for Telecom Networks to invest.

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  3. The price of copper
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8 Responses to “LLU price range”

  1. Willie Says:
    July 30th, 2007 at 9:51 am

    If it can be profitable below $25 why doesn’t the government just buy the LL from Telecom Networks. According to the torys its infrastructure and therefore a viable government asset. So why waste time mucking around with telecom?

    I sense the answer lies in everyones desire to get telecom to pay the cost of the LL while they reap the benefits.

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  2. iain Dale Says:
    July 30th, 2007 at 9:52 am

    David
    Could you email me? Can’t find your comntact details anywhere on your blog!

    iain AT iaindale DOT com

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  3. baxter Says:
    July 30th, 2007 at 4:46 pm

    I think Willie’s right. Winston and his Liabor colleagues have their knots in a twist over the possible sale of Auckland Airport. Telecom have offered their infrastructure for sale so why doesn’t the Goverment put all the angst to rest by buying it and then making access availiable real cheap.

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  4. David Farrar (1,738) Says:
    July 30th, 2007 at 5:09 pm

    Telecom are not yet offering their network division for sale. But if they did, then an SOE model like Transpower could be an option.

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  5. Selma Bouvier Says:
    July 30th, 2007 at 7:57 pm

    More interested in what would be the price for naked DSL.
    I presume that getting rid of the dial tone WONT get rid of the entire line and local calling fee.

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  6. Col Says:
    July 30th, 2007 at 10:05 pm

    The current bitstream price is $26.46. That doesn’t really tell you anything about where the LLU price should be – the two prices are unrelated.

    Bitstream is the “clothed” service when the end user is buying a telephone line – it pays for DSLAMs etc. The LLU price pays for the copper etc.

    The naked DSL price would be expected to be somewhere around the sum of the bitstream price + the LLU price.

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  7. anonymouse Says:
    July 31st, 2007 at 10:14 am

    From the Commerce commission this morning,


    The draft determinations set monthly rental charges for access to the local loop service at $16.49 per month for urban areas and $32.20 per month for non-urban areas. The draft charge for the transfer of a customer to the UCLL service is set at $83.70.

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  8. Theresa Says:
    August 1st, 2007 at 6:29 am

    Really glad I left now – riding a horse across South America is a lot more fun!

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