Swain: Telco Act gets minor changes but no overhaul

Changes to the Telecommunications Act shouldn't be taken as an indication the entire act is flawed, says the Minister of Telecommunications Paul Swain.

Changes to the Telecommunications Act shouldn't be taken as an indication the entire act is flawed, says the Minister of Telecommunications Paul Swain.

Swain has asked the Telecommunications Commissioner to review part of the legislation that deals with the "initial pricing principle".

Part of the first schedule attached to the act, the issue surrounds any “bundle of retail services offered by means of Telecom’s fixed telecommunications network”. In essence, Telecom would be forced to offer a double discount on any bundle of services which includes a "price capped residential telephone service" - once based on international benchmarks and again at a fixed 2%. In a written statement, Swain says this was not what the government had intended when drafting the legislation.

“The intent of the government’s wholesaling policy was for the price-capped residential access included in a wholesale service bundle to be discounted at a single rate of 2%. The remaining services in the bundle were to be discounted by benchmarking against discounts applied to comparable bundles that do not include price-capped residential access and calling in comparable countries."

Part of the act allows the commissioner to review the legislation if asked to by the minister, and the commissioner's office has agreed to do just that. It will recommend to the minister what changes, if any, should be made.

Telecom claims the error points to a larger problem with the legislation - that of misinterpreting what was intended by the government of the day.

"There are already signs of this happening – such as the draft ruling from the Telecommunications Commissioner which would require regulated wholesaling even in areas where there is competition. We don’t think the government intended that," says Telecom's general manager of government and industry relations, Bruce Parkes in a written statement.

However, Swain says the act is sound and there is no need to make changes to the legislation itself.

"The Telecommunications Act provides for designated services such as wholesale bundles to be changed through regulation using the procedure for altering regulated services. This procedure is better suited to addressing the error than the longer process of changing the Telecommunications Act, especially as only a very small part of the statute is at issue."

Swain also defends the decision made by the commissioner to date and says there will be no review of the commissioner's rulings.

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