InternetNZ pushes for UK-style separation of Telecom’s operations

InternetNZ also concerned that the penalties suggested for anti-competitive behaviour are too low

InternetNZ is backing full operational separation of Telecom in its submission on the Telecommunications Bill.

The accounting separation proposed in the current version of the bill is lacking in several important respects, says InternetNZ.

The Standard Access Principles set out in the bill, which detail the terms under which rivals can access Telecom’s network, “are too generic and [also] set the compliance levels too low,” says InternetNZ. UK and Australian principles are a better guide to what is effective.

The main bottleneck, which leads to market failure, occurs on the access-side of the arrangement, says InternetNZ. The restructure of UK incumbent BT has resulted in this part of BT’s operation being confined to “a separate and clearly defined division (Openreach) and [stipulates that] the ‘bottleneck’ services are to be supplied at wholesale prices, on the same terms as BT makes those services available to itself”.

This is a more appropriate model, suggests InternetNZ. The organisation is also concerned that the penalties suggested in the bill for anti-competitive behaviour are too low and so are unlikely to be an effective deterrent.

It also flagged its concern over “the apparent low level of resources at both the Ministry of Economic Development (MED) and the Commerce Commission available for the development of policy advice, and for the effective monitoring of developments in the telecommunications sector.”

“InternetNZ is not disputing the use of external advice. This is commonplace and even necessary, particularly in instances where advice from international experts is required.

“[However], it is very evident, from the background papers, the degree to which the ministry was heavily reliant on external advice.

“InternetNZ requests that the select committee give particular consideration to the level of resources required by central government and the regulator to effectively implement and monitor the reform measures contained in the proposed legislation,” says the organisation.

Regulation of the telecommunications market goes beyond technical or even commercial concerns to the heart of 21st-century nation-building, says the InternetNZ submission.

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