Hon David Cunliffe
Minister for Communications and Information Technology

30 May 2008 Media Statement

Minister calls for fundamental review of TSO

Communications and Information Technology Minister David Cunliffe has called for a ‘fundamental review’ of the local service Telecommunications Service Obligations (TSO).

The TSO require the supply of certain telecommunications services to meet government social objectives. There are currently two TSO instruments, the local residential telephone service and the telecommunications relay service.

“A key conclusion that has emerged from the government TSO review is that reform of the Local Service TSO has to be “back to basics”. Industry feedback has made clear that the existing arrangements for the local service TSO are seen as clumsy, time-consuming and an expensive tax on entrants.”

Other issues included the lack of specific input-based performance metrics, the lack of openness to contestable entry, and the low minimum speed requirements.

“A key issue for discussion is whether a fundamental overhaul reflecting the spirit of the original Kiwi Share is now in order.”

Mr Cunliffe questioned whether the rural service aspects of the TSO should be made fully contestable and technology neutral, and/or whether it should be upgraded to cover basic broadband, at a meeting of the Telecommunications Carriers Forum (TCF) today.

“I welcome Telecom’s willingness to discuss entering into commitments for investing all TSO revenue from other carriers as new capital expenditure targeted at low population rural areas (zone 4), and to leave “no stone unturned” for improving rural broadband.”

Further discussion with industry and consumer groups, including Telecom, will occur over the coming months.

Mr Cunliffe indicated the government would consider a full range of policy options to deliver the best result for rural New Zealand.

Mr Cunliffe noted the TSO review was an essential part of the government’s rural broadband strategy and it would need to be compatible with other aspects of the rural strategy including the rural broadband fund announced in the Budget.

“I have outlined to the TCF Forum today my intention to bring the policy review phase of the TSO review to a firm conclusion during this term of government.”

Click here to view a copy of the Minister’s TSO speech notes.

ENDS

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