Commission releases draft determination: cellphone

Commission releases draft determination on number portability cost allocation

The Commerce Commission today released a draft determination dealing with the allocation of costs for the provision of local and cellular telephone number portability among the telecommunications industry. Number Portability is a facility that enables customers to keep their existing telephone number when changing their local or mobile access and calling supplier.

A copy of the draft determination is available on the Commission¡¦s website, www.comcom.govt.nz. The Commission invites submissions on the draft determination by 7 February 2005.

In 2003, the Commission received a multi-party application from TelstraClear, CallPlus, Compass Communications, IHUG and Worldxchange, requesting that the Commission allocate the costs of providing number portability among the industry.

Concurrent with the Commission¡¦s consideration of the application, the Telecommunications Industry Forum is developing a system that will deliver local and cellular telephone number portability in New Zealand.

Background

(i) Number portability is a facility that enables customers to keep their existing telephone number when changing their local or mobile access and calling supplier. Number portability will enable customers to switch service providers while maintaining their existing telephone numbers.

(ii) On 26 March 2003, the Commission received a multiparty application for determination in respect of local and cellular telephone number portability. The application requested that the Commission develop a formula for allocating the cost of delivering the number portability service between the access seekers and all access providers of the service.

(iii) Parallel with the application, the Telecommunications Carriers¡¦ Forum (¡¥TCF¡¦) has been independently developing the functions that must be performed by a system for delivering the service and the standard to which those functions must be performed. The application does not request that the Commission determine these matters.

(iv) The Commission is satisfied for the purpose of this draft determination that the TCF¡¦s draft code development work provides an adequate description of the functions and standards of the local and cellular telephone number portability services.

(v) In developing a formula for the allocation of costs, the Commission is required to ensure that the formula will serve to promote competition in telecommunications markets for the long-term benefit of end-users of telecommunications services within New Zealand.

(vi) The Commission has identified four classes of costs arising from the implementation of number portability: industry common set-up costs, operator specific set-up costs, per-line set-up costs, and additional call conveyance costs.

(vii) The Commission¡¦s preliminary view is that:

„X Industry common set-up costs of local and cellular number portability should be allocated amongst all providers of local and/or cellular telephone services respectively in line with market share, measured by subscriber numbers.

„X Operator specific set-up costs should be borne by each operator, providing incentives for each operator to minimise costs while maintaining the ability and incentive to compete.

„X Per-line set-up costs should be recoverable by a donor network operator from a recipient network operator. The donor network operator should not seek to recover any part of those costs from the out-porting customer.

„X Each operator should bear its own additional call conveyance costs. Additional call conveyance costs are minimal using an Intelligent Network system to provide number portability. To the extent that there are any additional call conveyance costs, an allocation rule requiring each operator to bear its own costs will provide appropriate incentives for operators to minimise those costs.

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