Mixed views on value of telco conference

Opinion was sharply divided among attendees on the worth of this week's Telecommunications Reform conference in Wellington.

Opinion was sharply divided among attendees on the worth of this week’s Telecommunications Reform conference in Wellington.

Some said the major speakers – particularly the traditional panel of carrier chief executives – rehearsed their old positions on the market, with Telecom again raising the question of fair shares for all telcos on the costs of the kiwi share agreement, and its competitors resisting such a move.

“I could have written all the speeches myself,” says one prominent delegate, who didn't wish to be named.

But many delegates are not quite so jaded or pessimistic. “We’re down to the short strokes now,” says Grahame Millar of Clear. The telcos’ positions have grown perceptibly closer, he suggests, particularly in all agreeing to support the principles of the Telecommunications Amendment Bill, now at the select committee stage.

A number of other delegates say they gained some useful nuggets of information and heard some stimulating debate at the event.

For instance, Bruce Parkes, Telecom’s general manager government and industry, says the Telecommunications Bill still doesn't tackle the problem of heavy internet use using free local calls in a “robust” way. Contrary to a widespread picture of flat-rate internet services pushing the “knowledge economy", they are actually handicapping its emergence, Parkes says. The charging scheme encourages users to stay on dial-up rather than moving to dedicated cable or ADSL, he says, which congests the public-switched telephone network. And effectively it means the less intensive dial-up users are subsidising the heavier users. Users should be given a “marginal cost signal”, possibly through a charge to their ISPs, that heavy use of dial-up is not beneficial to the whole internet-using community, he says.

Grant Forsyth of Clear suggests Parkes’s is an inconsistent point of view, as Xtra provides flat-rate services itself. “Where would the marginal cost signal come from?” he asks.

The prospect of charging ISPs raises the question of the artificial distinction between ISPs and carriers, which several delegates agree should be tackled, and was not approached in the Telecommunications Bill. The fundamental difference is that carriers pay interconnection fees among themselves, but ISPs use carriers without paying a fee.

A further distortion of the competitive environment the new bill tries to create was identified by Clear’s Millar. He says while telcos will be allowed to buy Telecom local loop services wholesale in the commercial space – a step short of full local-loop unbundling - this reform does not extend to residential services. This leaves Telecom with an effective monopoly in residential local calls, he says.

Meanwhile, Telecom chief Theresa Gattung says any marginal profit Telecom could make on a deployment of higher-capacity data links to smaller centres would probably be swallowed up in kiwi share concessions, making it a zero-profit exercise.

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