Inquiry reports: wholesale access to local loop on the way

The ministerial inquiry into telecommunications report has been released by government and Paul Swain hopes to see relevant legislation put in place by the end of the year.

The ministerial inquiry into telecommunications report has been released by government and Paul Swain hopes to see relevant legislation put in place by the end of the year.

The final report has only minor changes from the draft report released in June, however the report does include a financial breakdown of the costs and benefits associated with the changes.

"Expert advice suggests these designations would achieve at least a $44 million annual net benefit to the New Zealand economy and an additional $328 million annual gain to consumers," says the report.

The report calls for the formation of two bodies - a Commissioner's office, with a staff of around 10 people costing up to $1.5 million a year of industry funding to run and an industry forum which would "prepare codes of practice for regulated services, for approval by the Commissioner".

The Forum, to be made up of industry players, would also establish a Disabilities Advisory Committee.

The Commissioner would direct the industry from a strategic overview position, while the Forum would work out the daily "nuts and bolts" of any decision.

Services to be regulated only if they meet a series of criteria, or "access objectives".

These include promoting long-term interests of end users by encouraging competition and efficiency among other objectives. These objectives would be set out in legislation.

Services that are regulated will be considered in either of two categories. "Specified" services and the higher level "designated" services. Designated services would include price regulation only in the event of disputes.

The Kiwi Share obligation will be "better defined and embodied in legislation to remove continuing areas of uncertainty" although Telecom will be able to offer lower line rentals to urban users it won't be able to charge ISPs for local calls made by residential customers accessing the Internet.

Only one service is to be designated immediately - access to Telecom's fixed-wire network, also known as the local loop.

Instead of unbundling the loop, as many players were seeking, Telecom will be required to "wholesale" access. That is it must charge other telcos seeking to use the loop only at a "cost-based" price.

Number portability is also on the designated list, but its inclusion has been deferred until July 2001 to give the Number Administration Deed time to reach a conclusion. If it hasn't been signed by July, the Commissioner would take over the process.

The report is available in PDF form at http://www.teleinquiry.govt.nz/reports/final/index.html

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