Kiwi Share means data too, says govt

For the first time, internet access has been rolled into Telecom's Kiwi Share Obligation, as part of the government's response to the telecommunications inquiry.

For the first time, internet access has been rolled into Telecom's Kiwi Share Obligation (KSO).

The KSO, signed between the government of the day and Telecom when the company was privatised in 1990, now includes a requirement to bring data capability to most New Zealand households.

Part of the government's decision on its telecommunications inquiry, the move also includes a clear direction that the KSO includes free local calls for dial up - a slap at Telecom's 0867 initiative.

The extent of the internet access obligation is modest, however. The minimum target is 9.6kbps capability to 99% of all New Zealand households, and 14.4kbps to 95% - and Telecom has two years in which to do this.

The requirement is part of the government's decision on the telecommunications inquiry. Ministers appear to have shied away from the inquiry's more radical recommendations, instead opting to designate only three services:

• Interconnection with Telecom's fixed network, either on forward looking cost based or bill and keep method;

• Wholesale of Telecom's fixed network services at retail price minus costs saved basis;

• Number portability, including 0800 numbers.

Minister of Communications Paul Swain said that legislation should be introduced early in 2001 and passed by the middle of the year.

As expected, a new telecommunications commissioner will be set up within the Commerce Commission. This regulator will be "adequately resourced" - again, no details are given, although the position will be funded through a levy imposed on the industry - and will have specialised staff with "sufficient" information gathering powers.

Issues such as local loop unbundling - adopted in other countries such as Australia and the United Kingdom, and vociferously advocated by the Telecommunications Users Association and Clear Communications - have been left to lie for now.

However the government's decision leaves that option open to the telecommunications commissioner, stating it will be "a key issue for the commissioner to monitor."

The overall role of the commissioner will be to speed up dispute resolution, Swain says: "People have been able to drag disputes through the court process. Our decision means the commissioner can make a determination, subject to of course to judicial review, and the parties can get on with their business. The biggest problem for the industry has been delay, and that has held up investment in the industry."

Telecom has to - yet again - come up with figures on how much the Kiwi costs the carrier.

Telecom told the inquiry the KSO cost it $100 million, a figure greeted with much scepticism at the time. Telecom is now to carry out an "initial costing" of the KSO, using "a robust and transparent costing methodology (including auditing and consultation with interested parties). The new telecommunications commissioner will have the final say on any determination of those costs.

The last government threatened regulation frequently but did nothing, Swain says.

"They cried wolf too often and in the end the industry lost confidence in them."

The inquiry team, headed by Hugh Fletcher, had also recommended an Industry Forum be set up, funded by an industry levy. The government has not taken up this suggestion, "although we do expect one to be formed," Swain says.

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