Select Committee makes changes to Telecomms Bill

The select committee reviewing the Telecommunications Bill has reported back to Telecommunications Minister Paul Swain and has made several changes to the draft bill.

The select committee reviewing the telecommunications bill has reported back to the minister Paul Swain and has made several changes to the draft bill.

In a written statement, Swain says: "I think that the amendments it has recommended will lead to a more robust regulatory regime for telecommunications."

The changes include shortening the time frame for the telecommunications commissioner to make decisions, as well as clarifying the telecommunications service obligation (TSO) that replaces the Kiwi Share obligation (KSO).

Telecom's pricing regime also comes under fire - the changes include outlawing the so-called "Baumol-Willig" rule which Telecom used to determine its original interconnection agreement with Clear. Clear took Telecom to the high court in 1991 to argue over how Telecom determined its billing and the Baumol-Willig rule, named after two US economics professors' advice to Telecom. The case ended up before the Privy Council which sided with Telecom. The committee has instead recommended the use of a different billing formula.

Several recommendations were also proposed by government members and will also be considered. These include a mandatory 24-month review of the local loop and whether or not the commissioner will "designate" local loop unbundling. The bill currently recommends the local loop, that "last mile" of copper lines connecting end users to the network, be wholesaled rather than unbundled. Some committee members would also like to see an explicit removal of monopoly rents from the pricing scheme and the inclusion of price-capped services in the bill - something the Telecommunications Inquiry recommended but which the draft copy of the bill did not include.

In July, IDGNet reported that Swain was defending the differences between the bill and the inquiry's recommendations (see Swain defends 'changes' in bill). Whether this recommendation is once again included in the new bill remains to be seen.

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