ICT Minister sends Telecom deed back to drawing board

Chorus has until October 21 to submit

ICT Minister Steven Joyce has rejected the proposed Deed of Undertakings governing Telecom’s copper-based services after structural separation of the company.

The minister has concerns at the lack of sufficiently clear internal boundaries and separation of processes within the post-separation Chorus Ltd entity, which would ensure access to the network is properly “open” as between Telecom and rival providers seeking supply of services from Chorus.

“First, the Deed provides that Chorus would not be required to implement any internal ordering, charging or billing service related to the internal supply of any service and contemplates permitted differences,” says the minister’s letter. The draft deed has attempted to write exclusions into the definition of “the same” in reference to services provided externally or internally.

“In my view as drafted, this qualification is too broad (in particular in relation to ordering) and risks undermining the EOI [equivalence of inputs] requirements of the [amended Telecommunications] Act,” says the letter. There should be a “clear process boundary” establishing which procedures must be the same for internal and external provision.

The minister accepts that where process steps might have to be needlessly repeated for the sake of establishing equivalence this may be wasteful; but those steps, he says, are not sufficiently clearly identified.

The draft Deed does not require Chorus to “implement substantial upgrade or redesign of its systems” to prevent access by employees to information from the other side of the boundaries so as to imperil EoI”. This clause should not limit Chorus’s obligation to comply with confidentiality undertakings or obligations to “ensure that the same information is provided internally and externally”, says the letter.

The minister also says record-keeping obligations agreed to are not sufficient and suggests obligations like those agreed to for open access to fibre services be written into the copper agreement. Doing so would help the Commerce Commission judge future compliance by Chorus, says the letter.

The minister suggests references to the Ultra-Fast Broadband (UFB) contract are not providing “full disclosure of the scope of the obligations” created under the Deed and should be either eliminated or put in a separate, publicly accessible document.

He also asks for improved access to the Commerce Commission’s information-gathering powers in investigations; these should not be limited to cases where a user has laid a complaint.

Joyce has given Chorus until October 21 to submit an amended Deed.

Telecom spokesperson Ian Bonnar says the company regards the requests as simply “drafting changes”; nothing asked for will be difficult to comply with, he says “and we’ll comfortably meet the deadline.”

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Tags telecomSteven JoyceChorus

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