Also known as "the last mile".

This is the physical telephone cable that connects between the neighbourhood switch box and the "demarcation point" which is there the line enters your home. Probably the most expensive part of setting up a landline telephone network. Which is why whoever owns it has such a powerful advantage, particularly in offering additional data services beyond voice, like ADSL.

Back when TelecomNZ was being privatized, hardly anybody outside Universities and other connected institutions had heard of the Internet. Back then, the only low-cost way for an individual to connect to the Internet from home was via dialup with a MoDem, which only relied on the normal voice-carrying capabilities of the phone network. Then later it was realized that TwistedPair? cabling had a bandwidth much greater than just that required for voice. Thus, you could provide much faster Internet services to people's homes by installing special equipment ("D-SLAMs") in the neighbourhood switch box and also providing the users with ADSL MoDems, which was a lot cheaper than running an entirely new set of wires into everybody's homes. Trouble is, this requires permission from whoever owns those switch boxes and wires, which opens interesting conflict-of-interest questions if they decide to offer such services themselves, in competition with you.

On 3rd May 2006, the New Zealand Government announced plans to unbundle the local loop in NZ. This means that Telecom will be forced to allow third parties access to install their own equipment to provide digital data services to people's homes on a non-discriminatory basis. Practically every other country in the OECD has already done a similar thing. The move has been discussed here for many years, and resisted by Telecom all that time. The response by its competitors to the announcement has been one of unanimous joy.