TSO, wholesale tasks still remain

With the interconnection decision behind them (assuming there is no Telecom appeal), Telecommunications Commissioner Douglas Webb and his staff still have two major tasks.

With the interconnection decision behind them (assuming there is no Telecom appeal), Telecommunications Commissioner Douglas Webb and his staff still have two major tasks.

These are setting terms for wholesaling of Telecom services to other telcos, and evaluating the costs of the Telecommunications Service Obligation (the replacement for the Kiwi Share) and deciding on a scheme for the apportioning of these costs among the telcos.

After Telecom provided its own estimate of the cost, earlier this year, the commissioner asked the company to revise it using a different methodology.

That revised estimate was due at the end of this week, but Telecom has asked for an extension of time, and “shortly” is the closest estimate Webb is prepared to give.

When the Telecom figure arrives, the commissioner and his staff will make its own calculation, “based on our evaluation of the underlying costs,” he says, and arrive at a proposed method of distribution. “We’ll then invite public views on our proposal.”

This process could take several months, and the final determination should emerge some time early next year, in time for commencement of the new regime at Telecom’s year-end date of June 30.

Division of the cost will only involve carriers in the full sense of the word, who run their own telecommunications networks and interconnect with Telecom’s. Internet service providers will not be asked to contribute directly, unless they are also network operators. ISPs have been credited by Telecom with producing a rise in TSO costs through encouraging long local calls. “Costs will doubtless flow through to ISPs, but the effect will be indirect,” Webb says.

In the area of wholesale pricing, “we expect to produce a draft determination in the next few weeks,” Webb said on Tuesday, then further comment will be invited from the industry through conferences, in a similar way to that by which the interconnection evaluation was managed.

In benchmarking wholesaling prices, they are being compared only to prices in the US, says Webb.

“There is a large wholesale market in Australia, but prices are not regulated there.”

They have been reached by commercial negotiation. “The UK does not meet our standards of comparability,” he says. Only the US decides payment for wholesale of telecomms services in similar ways to those proposed for New Zealand.

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