MCMC to 'stand firm' on opening up access, Telekom objects

The Malaysian Communications and Multimedia Commission (MCMC) is pressing ahead with plans to prise open access to the local loop, shoving aside some strong objections from incumbent Telekom Malaysia Bhd. In a report issued last week detailing industry feedback it had received, MCMC said it "stands firm" on a July 2004 deadline for issuing a Determination on Access List incorporating Access to Network Elements (ANE). The Access List is a list of network facilities and services that providers of such facilities and services are bound by law to supply to other providers that want them. The plan to make ANE mandatory would put the copper-based local loop infrastructure into the list, which would mean that owners of such facilities -- "access providers" like Telekom Malaysia, which owns more than 90% of the local loop in Malaysia -- would have to let in "access seekers" that want to use its network to provide services. Such infrastructure is defined as the subscriber network last-mile that connects the customer to the local switch, or "access network" in short. "The access network remains the least competitive segment, even after 10 years of liberalisation in fixed services," MCMC said. "ANE is about effective competition, choice to customers and promoting broadband services." MCMC signalled its intention to promote greater competition for high-bandwidth services like broadband Internet access by opening up the copper last-mile when it issued its Public Consultation Paper on Effective Competition in the Access Network in July. It said then that the "access network for fixed services ... has the potential for providing multiple service offerings utilising ... the local loop, in particular (to provide) advanced application services, including high-speed Internet access." The local loop is currently used to connect about 4.5 million subscribers to fixed line services; and 2.5 million dialup and 70,000 broadband access subscribers to the Internet. "Therefore, there is a need to provide additional impetus to the communications and multimedia industry by ... making available broadband services through the introduction of effective competition in the access network," it said. Telekom objects Almost all local telecommunications service providers that gave their feedback on the plan to unbundle the copper-based local loop lauded the initiative, with the exception of Telekom Malaysia, "as anticipated," according to MCMC in its latest report. Among other comments, Telekom Malaysia argued MCMC did not provide sufficient justification for additional access competition, as it claimed there was no clear evidence that Internet and broadband uptake in Malaysia was lagging other countries in the region. The company also claimed unbundling the local loop would undermine efforts at bridging the digital divide and improving "teledensity" in rural and remote regions, by shifting competitive focus to urban areas. In its replies to the arguments put forward by Telekom Malaysia, MCMC said the company's contention that there was adequate broadband uptake was "not true," and that teledensity targets in unserved and under-served areas could be raised through the Universal Service Provision programme. MCMC pointed to International Telecommunication Union statistics which showed Malaysia's broadband penetration rate at less than 1% of population, compared to 5.5% in Singapore, 9.4% in Taiwan, and 14.6% in Hong Kong. MCMC also countered Telekom Malaysia's argument that it would be premature to unbundle the local loop given Malaysia's relatively low teledensity, by pointing out that fixed service teledensity was already in decline, dropping from 19.7% of the population in 1998 to about 18.7% this year. Opportunity, not adversity It portrayed the move as an opportunity for the company to provide wholesale broadband data services, beside voice services. "The challenge lies in the change of mindset of the incumbent in treating its competitors as its customers, and also engaging in healthy competition, which will boost innovation ... and choice," it added. In setting the agenda for more competition in access networks, MCMC said that access providers would be required to prepare and maintain an Access Reference Document (ARD) that states the network facilities and services on the Access List each provider supplies to itself and to third parties, and the costs, terms and conditions at which they are provided. A Public Inquiry on the Access List would be conducted next year to discuss the timelines involved in preparing the document. Malaysian Access Forum Bhd, the designated access forum, would also be tapped to develop codes to regulate access to access networks. It would be given six months to complete its work, according to MCMC. The report can be downloaded at http://www.mcmc.gov.my/link_file/Admin/FactsAndFigures/Paper/PC%20Report%20ECAN.pdf.