Commission reports on Sprint’s compliance

3 March 2006/102

Commission reports to Minister on Sprint’s compliance with Service Quality Measures for Relay Service

The Commerce Commission has presented its report to the Minister of Communications on Sprint International New Zealand Limited’s performance in complying with the TSO Deed for Telecommunications Relay Services (TRS) for the hearing impaired.

Each year, Sprint is required to provide the Commission with information on its compliance with the service quality measures in the TRS Deed TSO instrument. The Commission reviews Sprint’s compliance, and notifies Sprint and the Minister of Communications of any non-compliance.

Manager of the Commission’s Network Access Group, Osmond Borthwick, said that the Commission has advised the Minister of Communications that, for its late delivery of Phase 2 Core Services, Sprint has not complied with clause 3.1 of the TRS Deed, which states that Phase 2 Core Services will be available on 31 March 2005. Phase 2 Core Services actually became available on 13 June 2005. Under TRS Deed Schedule 2, Service Availability, a financial penalty has been incurred for this non-compliance.

Sprint has also reported compliance with all five service quality measures defined in Schedule 3 of the Deed for the 2004/05 financial year. The Commission is satisfied that Sprint has complied with four out of the five service quality measures. For service quality measure 5 (Dialling Response for Outward Calls) however, the Commission has no basis on which to comment on Sprint’s performance as the Commission determined that Sprint has not complied with the requirements set down in clause 9.4 of the Deed, through not using a statistically valid methodology to assess the service quality measure as defined in schedule 3 of the Deed. No financial penalties are linked to this finding.

The Commission and the Ministry of Economic Development are working closely with Sprint to define a new set of guidelines for upcoming TSO periods, so that in future the results of service quality measure 5 can be more accurately assessed.

Telecommunications Act 2001 Background

The relevant TSO instrument is the TSO Deed for Telecommunications Relay Services dated July 9, 2004 between the Crown and Sprint International New Zealand, (‘the Deed’). Under the Deed, Sprint agreed with the Crown that Telecommunications Relay Services would meet the service quality measures in schedule 3 of the Deed.

Section 80 of the Telecommunications Act states:

Assessment of compliance with TSO instrument
Not later than 60 working days after the end of each financial year of a TSP under a TSO instrument, the Commission must –
a) Assess the TSP’s compliance with the TSO instrument during that financial year in accordance with any process set out in the TSO instrument; and
b) Notify the TSP and the Minister in writing of any non-compliance by the TSP with the TSO instrument.

Clause 3.1 of the Deed states that:

The TRS Provider will provide the range of services described in Schedule 1 - Telecommunications Relay Service: The Sprint Tender ("Schedule 1"). The TRS will be available in two Phases as identified in section 2.4 of Schedule 1. Phase 1 services will be available on the Launch Date. Phase 2 services will be available on 31 March 2005.

Schedule 2, Service Availability of the Deed states:

Phase 2 Core Services: Service Availability discount will apply for delay in the availability of Phase 2 Core Services in the amount of $1000 for each day from and including 1 April 2005 until all Phase 2 Services are available.

Phase 2 Core Services went live on 13 June 2005, so the service availability financial penalty is for 73 days from 1 April 2005 to 12 June 2005.

The Performance Standard for Service Quality Measure 5: Dialling Response for Outward Calls is that at least 85% of outgoing calls from the TRS system will be dialled by relay assistants within 15 seconds of receiving call destination information from the call originator (quarterly figures).

Service Level by Quarter as Reported by Sprint
Quarter Performance
4th Q 2004 100%
1st Q 2005 93%
2nd Q 2005 97%

Clause 9.4 of the Deed states:

The TRS Provider annual report will provide such information as may be reasonably necessary for the Commission to assess the TRS Provider’s compliance with the performance standards in the Service Quality Measures set out in Schedule 3.

It is the Commission’s view that although Sprint has reported compliance for measure 5, the methodology it used to assess its performance was not statistically valid. Having a statistically valid methodology is, as per clause 9.4, information which is reasonably necessary to assess compliance. The absence of a statistically valid methodology is non-compliance with the requirements of clause 9.4 and the Commission has no basis on which to comment on Sprint’s performance for SQM 5.

ENDS

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