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Govt Announces Decision On Telecom 0867 Initiative

The Government is satisfied that assurances now given by Telecom for its 0867 initiative meet the policy objectives of its Kiwi Share Obligations (KSO), Minister of Finance Sir William Birch and Communications Minister Maurice Williamson announced today.

"If these assurances are breached, the Crown will be in a position to legally enforce the KSO against Telecom," the Ministers said.

Telecom, in response to the rising demand in Internet traffic, announced in June that it intended introducing a new service for residential customers to access Internet Service Providers (ISPs), using a new 0867 number.

Telecom also proposed introducing a two cents per minute charge after the first 10 hours of calling per month for residential Internet calls to ISPs accessed by a local seven digit telephone number.

"We received legal advice that this charge may be in breach of the requirement in Telecom's KSO to maintain a local free-calling option for residential customers. Telecom's advice differed from this," the Ministers said.

"We've had discussions with Telecom on the possible application of the KSO on the initiative. Our aim has been to ensure that the interests of residential customers are sufficiently protected.

"The Crown's key concerns were the maintenance of a free-calling option to ISPs for residential customers accessing the Internet and the maintenance of satisfactory service quality."

The Ministers said later, following discussions, Telecom gave detailed assurances to the Crown. In summary, these are:

* Calls to 0867 numbers within the same local calling area will be free to residential customers except where customers have chosen other options.

* Telecom will ensure residential calls to 0867 numbers are of no worse quality than ordinary residential calls.

* Telecom will monitor standards to ensure quality is maintained. These results will be published with the existing service quality disclosure.

* Telecom will not introduce the new charge for residential customers accessing ISPs on local seven digit telephone numbers before November 1 1999.

* 0867 calls passed in the same local calling area to ISPs, or passed to carriers at a network interface, will be free of charge to the ISP or carrier.

* Telecom will actively seek agreements with other carriers and ISPs for the provision by Telecom of the 0867 service.

"The Government considers that while Telecom meets these assurances, the policy objectives of the KSO are being met.

"This is because residential customers have a local free-calling option for making calls to ISPs to access the Internet.

"If Telecom breaches its assurances in the future, the Crown will be able to legally enforce the KSO against Telecom," the Ministers said.

ENDS

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