New Zealand finally gets local loop unbundling

After far too long, it looks like Telecom New Zealand, the incumbent monopoly telecommunications provider in New Zealand, is being forced into local loop unbundling.

Part of the reason it's taken so long is that Telecom is New Zealand's biggest public company and holds a great deal of implicit leverage. Personally I think that splitting the company into three means they'll do far better in the medium term, simply by growing the market, something which local loop unbundling has shown to be very effective at elsewhere.

The dynamic is pretty simple: when companies compete to offer broadband and similar services to consumers, those services become cheaper, easier and better supported, leading to greater take-up. As the numbers of broadband-connected homes and businesses rises, more of those businesses start connecting with more of those homes, and before you know it, e-commerce is really taking off. Most of those businesses don't know one end of an internet from the other, so third parties spring up to help them and before you know there's an entire industry. Entry into that industry is entirely predicated on what Telecom has to sell: high quality Internet connections.