Communications minister David Cunliffe has launched a review into the Telecommunications Service Obligation or TSO this morning, saying it wants to ensure basic telephone and internet services in rural areas for residential users.
Charge-free local calling and dial-up internet access will be retained no matter what, but the compensation paid to Telecom as levied under the TSO from other telecommunications companies will be reviewed.
Supply of phone and internet access services under the TSO may also be made contestable, and multiple providers may be appointed if the review finds this feasible. Other areas to be considered include supplying voice service over the Internet Protocol, which the telecommunications industry as a whole is currently migrating towards.
The TSO is also being looked at as a whole, to see if it is achieving the objectives of its framework and the wider targets of the telecommunications regulatory regime.
The review is being conducted by the Ministry of Economic Development, and forms part of the minister's industry stocktake announcement last May. It ties up with other government initiatives such as the Digital and Rural Broadband Strategies and opinions are being sought for it through a discussion document to be released in the first half of this year.
Telecom spokesman John Goulter would not comment on the specifics in the government's statement document, but says the telco welcomes the TSO review. It's timely, he says, and Telecom intends to work constructively with the government to provide its views during the discussion phase.
Update: Vodafone public affairs manager Roger Ellis says the telco welcomes the review of the TSO, which was first put in place in 1990. Ellis says it's vital that government policy is kept up to date, and adds that the present arrangement acts as a barrier to competitors due to the additional costs imposed.
Over the next five years, Vodafone expects to pay around $60 million to help Telecom service some 60,000 customers that the incumbent states are not commercially viable, Ellis says.