Telecom Inqiury 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.
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.
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.