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Telecom notified of Separation Undertakings breach

Commission notifies Telecom of breach of the Separation Undertakings

Telecommunications Commissioner Dr Ross Patterson has written to Telecom advising that the first prima facie breach of the Separation Undertakings has occurred. It appears that the breach is unintentional.

The breach relates to Telecom's failure to consult and provide information to the Minister of Telecommunications, David Cunliffe, and the Commerce Commission before 30 June 2008 about the method by which Telecom classifies customer service addresses. This information forms the basis of Telecom's commitment to migrate 80% of the country's lines from the old Public Switched Telephone Network (PSTN) network to an advanced broadband network at a minimum speed of 10 Mbps by 2012.

Dr Patterson said, "It is early days in the implementation of the Undertakings. I am discussing the matter with Telecom and the Independent Oversight Group (IOG) to ensure that the breach is remedied quickly and that Telecom puts appropriate steps in place to ensure that similar breaches do not occur again. Dr Paul Reynolds, Chief Executive of Telecom, is committed to meeting the requirements in the undertaking including those relating to Telecom's network upgrade commitments."

"I have indicated to both Dr Reynolds and the IOG that if the outcome of these discussions is satisfactory the Commission does not intend to use the formal enforcement remedies under the Telecommunications Act. However the Commission has reserved the right to reconsider this should the issue not be addressed to its satisfaction," said Dr Patterson.


Background

The Separation Undertakings are a deed between the Crown and Telecom which the Commission has the role to enforce. Within the document are a number of specific milestones and commitments that must be met by Telecom. These require Telecom business units to treat the other Telecom business units and external wholesale customers in an equal and transparent manner.

As part of the undertakings Telecom committed over a four year period to migrate its existing voice and data products built on the old PSTN network to products based on inputs from its new advanced broadband network. This migration is being achieved through Telecom's current cabinetisation programme.

Public Switched Telephone Network (PSTN): The switched telephone networks of the major operators, on which calls can be made to all customers of all PSTNs. The Telecommunications Act 2001 defines a PSTN as "a dial-up telephone network used, or intended for use, in whole or in part, by the public for the purposes of providing telecommunication between telephone devices."


ENDS

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