So the govt. has announced that they will unbundle the local loop. For those non techies among you what this means is that organizations other than Telecom NZ will be able to place equipment in Telecom's phone exchanges and plug the copper wires that run to your house into their own equipment.

The argument for doing this is that it will encourage more investment in broadband in New Zealand- that it will, but, it will be utterly the wrong type of investment.

I really fail to see how having 3rd parties spend millions of dollars putting their own DSLAMs into the exchanges can be considered good use of the limited pool of broadband investment dollars in this country.

The primary issues with Telecom and ADLS at the moment are

1. Backhaul capacity (Easy to regulate a fix)
2. Requirement to have a voice phone line to use ADSL.
   This is really a the primary block to competition in the local lines market. Let people have broadband without a phone line and you'll see heaps of new VOIP based local line providers pop up. (Easy to regulate)
3. Connection service times, price etc.... all easily regulated

It seems REALLY stupid to me that we're going to have what limited capital resources we have in New Zealand being spent on duplicating what is perfectly functional hardware in the exchanges. We should be finding ways to encourage investment in new infrastructure- the stuff that will be replacing copper phone lines. ULL does just the opposite. We want people to invest in laying fiber, deploying wimax etc... not putting more DSLAMs into phone exchanges

[Disclosure]
Most of the rest of the package seems great- things like preventing predatory pricing etc....FWIW: I am not a customer of Telecom NZ and have not been for a long time. I have a TelstraClear Cable Internet connection at home. No phone line and use FX networks to provide VOIP telephones for my Wellington office.
As of yesterday afternoon @ $4.73 my company is a shareholder in Telecom NZ. A 14% odd dividend yield from an NZ Blue Chip is just too good to pass up.