ComCom begins mobile termination pricing process

Scoping workshop will be followed by consultation with providers

The Commerce Commission has begun the process for determining the wholesale price for terminating mobile calls and text messages, following the decision in August by the Communications and IT minister Steven Joyce to accept the Commission’s recommendation to amend the Telecommunications Act 2001 to allow the regulation of mobile termination access services.

An announcement by the Commission on the NZX website today reads: "The Commission expects that regulation of these termination rates will lead to greater competition at the retail level, as mobile and fixed line phone companies pass on the cost-savings to New Zealanders.

"The first stage of this process will be to hold a scoping workshop for the telecommunications industry and other interested parties. The Commission has today issued a letter outlining the matters to be discussed at the scoping workshop.

"The key issue raised in the Commission’s investigation into mobile termination access services was the wholesale price charged for termination. There was widespread acceptance that differences in non-price terms in the existing commercial agreements used by the industry were not material."

In the statment, Telecommunications Commissioner Dr Ross Patterson is quoted as saying: "The Commission has proposed that the final regulation should focus solely on setting a wholesale price. Unless the industry provides compelling arguments to the contrary, non-price terms such as operational arrangements and technical specifications will continue as negotiated by the industry.

“The focus on price terms in the standard terms determination (STD) will address a key driver to New Zealand’s high mobile retail prices,” says Patterson.

After the scoping workshop, the Commission will issue a notice to the access provider(s) to submit a proposal for standard terms to govern the supply of mobile termination access services. Following consultation on the proposal, the Commission will issue an STD that specifies the regulated price for the supply of the mobile termination access services, and sets out any additional terms or conditions on which the service must be supplied.

The Commission estimates the STD process will be completed by March 31 2011. Documents relating to Commission's actions on Mobile Termination can be viewed here.

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