The new government looks likely to postpone any action on the 0867 numbering row until after later this year.
Incoming Commerce Minister Paul Swain, who before Christmas indicated he would move on the issue immediately, now says it is too tightly bound into other telecommunications regulatory issues to deal with separately.
"I'm not sure whether trying to solve that issue in isolation from others is a good idea," he says. "My preference now is to see it as part of the telecommunications inquiry. As part of that we will be looking at how successful the Kiwi Share option has been."
The government has legal advice on the 0867 issue and the Kiwi Share agreement between the government and Telecom. This was carried out prior to the election, and, as with most legal advice to the government, has not been released.
However the former minister of communications, Maurice Williamson, did reveal the advice was that Telecom's 0867 arrangement does breach the Kiwi Share.
"Given that we've got an inquiry just about to be launched, we want to put the 0867 issue in there as well, and the issue we're debating at the moment is whether solving it in isolation is a good idea or not," says Swain.
"My view is it needs to be seen in line with interconnection and with issues like infrastructure development."
The government is yet to consider a report from Ovum telecommunications consulting group which looks at "unbundling" the local loop. That option would require Telecom to provide competitors such as Clear and Telstra space on its local loop access network, with a view to stimulating competition. However no action is likely on that report until after the telecommunications inquiry reports back, says Swain.
"Unbundling is just one option. Another approach, which has been tried overseas, is forward cost interconnection, which takes the sunk cost in the incumbent network as given, and says there has already been a return on that. Other carriers are charged an interconnection rate similar to what Telecom would charge itself."
That requires fairly clear disclosure from the incumbent, he says. "And you can end up with a mountain of computer printouts that say a lot but tell you nothing."
Whatever option is taken, it is part of a broader issue about how to get proper interconnection rules, he says. "It all comes back to the issue of the dominant role of the incumbent and the future competitive environment. That's why I want an inquiry to look at all these issues together, rather than in isolation."
The terms of reference are being finalised and will go to Cabinet shortly, he says. After that someone will be appointed to conduct the inquiry. There is a need for quick action, he says. Telecom and Clear's interconnection agreement expires at the end of the year and will be renegotiated over the coming months. Swain would like to have any new rules in place before those two carriers get too far in their negotiations.
"However I imagine it's likely to end up in another round of litigation, given the history of this thing."
"But in my view it would be good to have a very good steer from the government of the type of environment and regulatory regime it intends, so at least there is some sort of benchmark they can use in those negotiations."