Telecommunications Inquiry Issues Paper Released
PRESS RELEASE – THURSDAY 6 APRIL 2000
TELECOMMUNICATIONS INQUIRY ISSUES PAPER RELEASED
The Ministerial Inquiry into Telecommunications today released its Issues paper. Written submissions on the paper are now invited.
In releasing the paper, Hugh Fletcher, Inquiry Chairman said “the Inquiry is seeking maximum input from the telecommunications industry and telecommunications users, including the general public. To enable the greatest possible engagement, we have extended the deadline for submissions to 12 May”.
The Issues paper elaborates on the terms of reference for the Inquiry, and attempts to highlight all important issues. If there are issues the paper does not canvass, submitters are encouraged to draw these to the Inquiry’s attention.
Mr Fletcher stated “the Inquiry is required to provide detailed recommendations to the Government on a range of issues. It is therefore important that, in addition to outlining any problems, submitters also consider solutions, including their costs and benefits, and whether structural, regulatory or industry self-regulation solutions are most appropriate.”
The Government wishes to ensure delivery of cost-efficient, timely and innovative telecommunications services on an ongoing, fair and equitable basis to all existing and potential users. Among a range of important issues for the Inquiry are:
ensuring that New
Zealand has a telecommunications policy that meets the
demands of an information economy;
whether there is a need for regulation to guide the
agreements between network operators that make it possible
for users on different networks to be connected
(“interconnection”); and
looking
at whether the Kiwi Share is still the best tool to
safeguard the telecommunications needs of residential users,
rural and urban alike.
The Inquiry panel
will release a draft report of its findings and
recommendations by 30 June for further public comment.
Submissions on the Issues paper will be a key input to the
draft report.
In addition to Mr Hugh Fletcher, other members of the Inquiry panel are Ms Cathie Harrison and Mr Allan Asher.
The Inquiry is due to report to the Minister of Communications at the end of September.
Hugh Fletcher
Inquiry Chairman END
The Issues paper can be downloaded from the Inquiry’s Website (www.teleinquiry.govt.nz). Hard copies can be requested from the Inquiry office (04 460 1375). A list of key points from the Issues paper is attached.
For further queries, contact:
John Gilbert
Inquiry Manager
P O Box 1473
Wellington
Tel: 64 4 460 1375
Fax 64 4 460
1374
Email: teleinquiry@med.govt.nz
Website:
www.teleinquiry.govt.nz
KEY POINTS FROM THE INQUIRY’S ISSUES PAPER
The information economy
Information and communications technologies are evolving and
traditional boundaries between services (e.g. telephony,
broadcasting and wireless communication) are breaking down.
These developments are changing
the nature of the telecommunications sector and laying the
foundation for an “information economy”.
An important aspect of an information economy
will be higher bandwidth services (e.g. high-speed Internet
access) that require a high speed data network, for example,
cable, third generation cellular technology, or a high speed
copper telephone circuit.
A key
issue for the Inquiry is the risk of a “digital divide”
emerging – a gap between information rich and information
poor – and how this risk can best be managed.
New Zealand’s approach to regulating telecommunications
services
Since the deregulation and privatisation
of telecommunications services, New Zealand has used a
“light handed” regulatory approach, relying on the Commerce
Act to deter anti-competitive behaviour and resolve
competition disputes. The Government is expected to
strengthen the Commerce Act in the near future.
New Zealand’s approach is in
contrast to most other countries, which have been more
active in their regulatory approach. For all countries,
however, the key regulatory issue has been, and remains, how
best to regulate the behaviour of the “incumbent” – Telecom
in New Zealand’s case.
Comparing
how New Zealand has performed relative to other countries is
complex and consensus difficult given differing views on
appropriate assumptions.
Interconnection
Telecommunication networks
need to interconnect so users on one network can connect to
users on another.
To date,
interconnection in New Zealand has been a matter of
negotiation between industry participants. While some
interconnection agreements have been reached promptly,
others have involved considerable delay and cost, sometimes
resulting in recourse to the Courts under the Commerce Act.
A key issue for the Inquiry is
whether there is a need for regulation to guide
interconnection negotiations and speed up the resolution of
any disputes.
Local loop
unbundling
The ‘local loop’ normally refers to
the copper wires, owned by Telecom, that enter each house
and office to provide individual access to the
telecommunications network. Wireless local loops are also
possible.
A key issue for the
Inquiry is whether local loop unbundling should be required
and, if so, on what conditions. Unbundling would allow
other providers (at a cost) to access Telecom’s local loop
as an alternative to establishing their own local loop
network.
The Kiwi Share
The
Kiwi Share, a special share in Telecom, requires Telecom to
provide residential users with a free local calling option;
keep line rental charges below a set level (and rural
rentals no higher than urban rentals); and maintain network
coverage at the level when Telecom was privatised.
The Kiwi Share continues to be
instrumental in ensuring affordable access to telephone
services by residential users, rural and urban alike.
A key issue for the Inquiry,
however, is whether the existing Kiwi Share is the best
means of ensuring New Zealand’s transition to an information
economy, or whether some other form of universal service
obligation is better suited.
Network
management
Explosive growth of Internet and other
forms of data traffic is placing increased demands on
network management and capacity.
Telecom said that network management was the reason for the
introduction of its 0867 Internet access code. Others said
Telecom was acting anti-competitively to avoid paying
interconnection charges. 0867 also inconvenienced other
providers’ customers as they had to change their Internet
access number.
A key issue for
the Inquiry is to determine what is the best way to ensure
efficient and fair network management.
Cellular technology
The use of cellular
phones is growing rapidly, resulting in increased
competition in telecommunications services.
There are a number of issues related to
cellular technology such as spectrum allocation, airtime
resale, roaming (access to another provider’s network
outside of the home networks coverage area) and access to
some infrastructure (e.g. the sharing of cell sites).
Numbering
In order for users to
easily change service providers, all telephone numbers
should ideally be portable.
At
present, a technology called ‘call-forwarding’ is used,
whereby a call is re-routed from the ‘old’ network number to
the ‘new’ network number. Some consider that this
technology is unsuitable and a more advanced solution is
desirable.
This issue is being
addressed within the framework of the industry’s ‘Numbering
Administration Deed’, along with how the cost would be
divided amongst providers if a more advanced solution is
adopted.
A key issue for the
Inquiry is whether the Deed is the best means of addressing
number administration and number portability issues.