Inquiry takes hard line on Kiwi Share

Yes, the Kiwi Share does cover dial-up Internet service, the telecommunications inquiry has decided - and Telecom is obliged to make sure its customers can get it.

Yes, the Kiwi Share does cover dial-up Internet service, the telecommunications inquiry has decided - and Telecom is obliged to make sure its customers can get it.

The inquiry's report says Telecom's proposal that it should be able charge ISPs for local calls by residential users to access the Internet is also a non-starter. That proposal came in the wake of Telecom's 0867 debacle, in the course of which it imposed a charge to force dial-up residential users to use the number range - and appeared to contend that the Kiwi Share did not cover dial-up Internet calls.

The report says Telecom's Kiwi Share obligations should be "better defined and embodied in legislation, to remove continuing areas of uncertainty."

Telecom's general manager of government and industry relations, Bruce Parkes says the company will vigorously resist any attempts to legislate what he describes as "a new Kiwi Share arrangement, as proposed in the inquiry report."

The report says that Telecom should be able to lower residential line rentals in urban areas - but puts the company on notice that the meaning of "ordinary residential telephone services" should evolve over time, "depending on the level of service that is supplied by Telecom to the majority of its residential customers or is technically capable of being supplied (in the absence of enhanced technologies such as ADSL) over Telecom’s copper wire fixed network."

The inquiry says that Telecom should ensure residential customers receive reliable voice service, particularly for 111 services and "reliable low-speed Internet access". It notes that some residential customers are not receiving this standard of service.

The most stinging recommendation of all may be that Telecom’s interconnection prices should not include a contribution to any losses arising from the Kiwi Share obligations - a repudiation of one of Telecom's core arguments on interconnection pricing over the past decade.

Parkes says Telecom "will not accept a proposal for suddenly making the Kiwi Share an open-ended obligation on Telecom, with potential for the costs to mount steadily over time.

"The real issue now is not whether Telecom has met its Kiwi Share obligations, but how New Zealand works to overcome an emerging digital divide and who will pay for any uneconomic upgrading of rural networks."

The inquiry decided the current wording of the Kiwi Share, which says residential line rentals should be capped unless overall profitability is "unreasonably impaired" remains "an appropriate mechanism for addressing any concerns that Telecom may have over the cost of the Kiwi Share obligations. It said Telecom "would not be able to establish such a case today."

Ihug director Nick Wood is shedding no tears for Telecom over the Kiwi Share proposals.

"Telecom's been making a fortune out of us for years, so why should anybody else contribute?" says Wood. "They've complained about how much it's going to cost to upgrade the rural market to bring it into the 21st century - but so what? They've been raping and pillaginging us in terms of profits for 15 years, why shouldn't they be forced to spend money on a part of the network that's falling to bits?"

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