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Telecom provides revised TSO cost to Commission

Telecom provides revised TSO cost to Commission

The Commerce Commission is required under the Telecommunications Act to determine annually the net cost to Telecom New Zealand Limited (Telecom) of providing local residential telephone services under Telecom’s telecommunications service obligation (TSO), and to apportion that cost between Telecom and other network operators.

As an input to the Commission’s process, Telecom was required to provide the Commission with a net cost calculation. On 19 September 2002, Telecom provided a calculation within the statutory timeframe of $226.5 million for the period from 20 December 2001 (the commencement date of the Act) to 30 June 2002. Telecom requested further time to supply a revised calculation in accordance with parameters set by the Commission.

Telecom has now provided the Commission with its revised TSO calculation, giving the net cost of complying with the TSO for local residential telephone service for the same period as $112 million (20 December 2001 to 30 June 2002).

In addition to Telecom providing a revised figure, the Commission has commenced work on its own calculations of the net TSO cost. The Commission is holding an industry workshop this week to outline its proposed approach to cost modelling and to discuss technical aspects of the modelling process.

The Commission expects to release a draft determination on the net TSO cost and how that cost will be apportioned across the industry early next year.

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