GATS says it all

I've had a chance to look at the WTO's General Agreement on Trade in Services (GATS) and how it relates to NZ and telecommunications. It's an interesting document, as only an international treaty hammered out by successive committees can be.

I've had a chance to look at the World Trade Organisation's General Agreement on Trade in Services (GATS) and how it relates to New Zealand and telecommunications. Thanks to Brian at the Ministry of Foreign Affairs and Trade (MFAT) for the copy.

It's an interesting document, as only an international treaty hammered out by successive committees can be. One of the key areas of the agreement is telecommunications, and it's got a lot to say about what countries can and can't do. One of the biggest areas is, of course, unbundling, but only because it doesn't get mentioned once.

That's right, the word unbundling isn't used at all in the entire document. However, its presence is felt all the way through it.

Section one of the schedule relating to telecommunications refers to competitive safeguards and immediately warns of anti-competitive issues surrounding monopoly providers.

"The anti-competitive practices referred to above shall include in particular:

(a) engaging in anti-competitive cross-subsidisation;

(b) using information obtained from competitors with anti-competitive results".

While the telcos have always muttered about Telecom's access to all their customer records, I think Telecom's "Chinese walls" policy will have taken care of the second part of that. The first, cross-subsidisation, is something that Telecom not only freely admits to be but says is necessary to retain the Kiwi Share, or Telecommunications Share Obligation (TSO), as it's now known. Without it, those commercially non-viable customers who live out in the remotest parts of the country, or central Auckland, still have to pay the full line rental charges because (to cut a long story short) nobody else is offering them a service so Telecom can do what it wants.

Telecom's recent kerfuffle over its offer of a 25% discount to any non-Telecom tolls customer who switches is simply another example of why access to Telecom's network needs to be mandated at its most basic level. Offering competitors' customers a discount seems to me to be an anti-competitive cross-subsidisation, as does charging a line rental at all, especially in light of Vodafone's TSO bill shock. Demanding Vodafone pay millions to keep Telecom's network operating in remote areas where Vodafone already has coverage strikes me as not only wrong, but not even what the Telecommunications Act was all about. The GATS document also doesn't seem to have room for such a payment.

"Any member has the right to define the kind of universal service obligation it wishes to maintain. Such obligations will not be regarded as anti-competitive per se, provided they are administered in a transparent, non-discriminatory and competitively neutral manner and are not more burdensome than necessary for the kind of universal service defined by the member." Well that rules out charging a network competitor which doesn't use the Telecom network to keep the network operating, I would have thought.

Amusingly, the agreement also calls for a transparent and public approach to interconnection agreements. If there's any commercial agreement that's representative of the confused and tortured state of telecommunications in New Zealand, it's the interconnection agreements.

Minister of Communications Paul Swain needs to get some serious advice on this matter -- the agreement's already signed and on the books. If we don't take it into account when looking at unbundling, what's the point of being involved in such an organisation in the first place?

Brislen is Computerworld Online'sreporter. Send letters for publication in Computerworld to Computerworld Letters.

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