VDSL2 shouldn't carry premium charge: Patterson

Telecommunications Commissioner Ross Patterson has thrown a spanner into Telecom's plan to charge customers extra for superfast broadband, a move that could have earned it tens of millions of dollars a year. Dr Patterson says his preliminary view is that Telecom Wholesale should not be able to charge a premium price for internet connections that use the latest copper-line technology, VDSL2. Telecom Wholesale boss Matt Crockett reiterated last week that Telecom intended to charge wholesale customers an extra $20 a month for VDSL2 connections, on top of its regular charge for ADSL and ADSL2 connections, which are set by regulation. His expectation was the charges, plus any extra retailer mark-up, would be passed on to consumers. Dr Patterson has since written to regulatory affairs head John Wesley-Smith saying the commission believes the superfast broadband service is likely to be caught by a December 2007 ruling that sets out the prices Telecom can charge wholesale customers for copper-line broadband, which would rule out any price premium. Telecom had 835,000 broadband customers at the end of June. If 10 per cent of them took up VDSL2 and it was allowed to charge them $20 extra a month, the extra charges would net the company $20m a year. Dr Patterson said the commission needed more information from Telecom before making a final decision. Consultation would be required and a decision might take nine months. Mr Crockett said Telecom believed it should be able to charge a premium price for a premium product. Last week Telecom Wholesale pushed back the launch of VDSL2 by "a matter of months" to iron out issues that emerged during testing. It announced an expanded pilot with 250 customers in five cities, starting Thursday. Customers on Telecom Wholesale's VDSL2 pilot have obtained average download speeds of 23 megabits per second and upload speeds of 7Mbps. These are about twice the speeds delivered by predecessor technology ADSL2.