Setting the scene for tomorrow’s Telecommunications & ICT Summit, which will be chaired by Forsyth Barr analyst Guy Hallwright, and bring Communications and IT minister Steven Joyce together with the heads of Telecom, TelstraClear, Two Degrees, Vodafone and the Commerce Commission, Mr Hallwright critiques the commission’s sub-loop unbundling decision.

In a newsletter to clients, Mr Hallwright says the commission’s determination on sub-loop unbundling (the price competitors will have to pay to access its roadside fibre cabinets) will “have the effect of reducing unbundled-local-loop-based competition. This is positive for Telecom.

The For-Barr telecommunications analyst accordingly sees Thursday’s ruling as a “positive for Telecom”.

Mr Hallwright draws similar conclusions about the commission’s decision as his counter-part at ABN Amro Craigs, and Telecom competitor’s Orcon and Vodafone, who slammed the decision.

The analyst notes that a competitor would have to have 35% or more of the lines into a cabinet to make the access rates attractive - a prohibitive figure when Telecom holds around 58% of the retail DSL market and most of its key competitors would struggle to get more than 10% of the customers connected to any given cabinet.

Mr Hallwright notes that the way backhaul charges are structured, accessing a cabinet becomes exponentially less economic for carriers with smaller market shares. Below a 25% share of a cabinet, costs become “prohibitive”.

He also makes the point that in the UK, there has already been a similar determination, resulting in a similar scenario: sub-loop access costing more than phone exchange access.

The result has been that BT’s sub-loop has been subject to very little unbundling, says Mr Hallwright.

Despite Telecom's apparent advantage in the sub-loop, For-Barr, like ABN Amro Craigs, has a hold rating on the company. Mr Hallwright notes risks around the government's fibre to the home initiative, among other challenges.

The 10th Annual Telecommunications and ICT Summit, to be held over Tuesday and Wednesday at Auckland’s Hyatt hotel, promises some pointed discussion, as National and Labour politicians rub shoulders with the bosses of all the major telecos, telecommunications commissioner Anita Mazzoleni, the omnipresence Telecommunications Users Association chief executive Ernie Newman and super-analyst Paul Budde, among others.

NBR will report any bloodshed live from the scene.