What's in the report?

The final report of the Government's Ministerial Inquiry into Telecommunications contains few amendments from the draft report three months ago.

The final report of the government's ministerial inquiry into telecommunications contains few amendments from the draft report three months ago.

The inquiry team still declines to tackle the local-loop unbundling (LLU) question head-on.

"We haven't ruled out local-loop unbundling" in the longer term, says inquiry team member Cathie Harrison. Some of the services Telecom offers already approach local-loop unbundling, she says. The inquiry has taken the halfway step of proposing "designation" of Telecom's "wholesaling of any [of its] retail services using its fixed-wire network." "Designation" means the service has to be provided, and priced under regulation.

Wholesaling of services means the provider decides what services are offered on the lines. Full LLU would hand the access seeker essentially a bare copper network to do with as it wishes. "This would be a very significant shift, in that it would require the incumbent to respond as requested to virtually any request for a network element," an appendix to the report says.

Deferring complete unbundling will allow "resolution of uncertainty over other aspects of the proposed regime," and allow overseas experience with LLU to be taken into account, the appendix says.

The draft report proposed designating a wide range of services, but the final report had dropped some of these to a new lesser category of "specified" services, where the service must be provided, but price controls are not applied.

Following feedback from interested parties, the inquiry decided that price controls were not needed on some services, and they merited a more light-handed regulatory approach, Harrison says.

Interconnection and leased line access "should be designated immediately with cost-based pricing principles," says the report. These principles should be decided by benchmarking against other countries.

Number allocation and portability will not be designated at present, since negotiations are still in progress around the Number Administration Deed, already agreed to by Telecom and some of its competitors. Harrison says she hopes these will bear fruit, but if a final settlement is not reached by the middle of next year, the facility may be designated, forcing the parties to reach agreement.

The establishment of a telecommunications commissioner to make determinations where agreement cannot be reached is still a feature of the report. The commissioner would also "direct and administer the process" for deciding which services should be designated or specified from time to time.

But the commissioner's powers have been reduced slightly in the final report. He/she will not be empowered to intervene in a situation where a commercial agreement has been reached among the parties. This power was included in the draft report, but respondents considered it "too intrusive. We were not persuaded that it was necessary," Harrison says.

The emphasis will be on industry self-management, and an Electronic Communications Industry Forum to assist this is recommended in the final report, as it was in the draft.

And if the report's recommendations get through subsequent political process, everyone in due course should get reliable "low-speed" Internet access. "The inquiry considers that low-speed data, as well as voice, are 'ordinary residential telephone services,' which Telecom is obliged to provide under the Kiwi Share agreement. "Low-speed" will probably mean in practice 14.4 Kbp/s minimum, Harrison says.

To encourage participation for all in the electronically driven economy, the report recommends setting up a body similar to Australia's National Office for the Information Economy (NOIE) http://www.noie.gov.au

The appendices to the report include a draft Electronic Communications Bill. Enshrining the recommendations in a piece of formal legislation was beneficial in that it helped focus the team's mind on some of the detailed implications of what they had recommended, Harrison says.

The full report and appendices are now available on the Web at http://www.teleinquiry.govt.nz.

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