Telecommunications Commissioner Douglas Webb says Telecom should be encouraged to invest and retain ‘first mover’ advantage rather than being forced by regulation to deliver video on demand and related serviced to the domestic market.

He says the incumbent needs to have the greatest incentive to replace its aging copper infrastructure and put more fibre in its network.

He cites British Telecom as spending three billion pounds to replace its copper infrastructure by 2010 to provide VoD and an array of business and entertainment applications.

Even in the US he says regulation of packet switched IP services has been rejected. He says future IP networking is more likely if Telecom has appropriate incentives to make investments.

If these new services don’t expand beyond the core business network in a reasonable time the Commerce Commission would reconsider its position.

Meantime Mr Webb is not convinced the public is ready to pay for such services as they’re still signing up for basic broadband and using mainstream services such as web browsing, email and audio downloading.

And he believes while the technology and carrier capability is there today video on demand and home video conferencing are unlikely to be economically viable for some time.

"Market demand is still some way off requiring carriers to invest in infrastructure, including putting a lot more fibre into the network and replacing copper."

However he says this will manly benefit large corporations and businesses leaving the delivery of such services to home and small businesses a high risk business. - Keith Newman