Government gives green light to Telecom's 0867 scheme

Ministers Williamson and Birch say 0867 scheme does fall within the 'policy objectives' of the kiwi share obligation

There’s nothing wrong with Telecom’s 0867 numbering scheme, but if they step out of line government will respond, says a joint statement from Maurice Williamson and Bill Birch’s offices today.

The ministers, for telecommunications and finance respectively, say Telecom’s move to force all ISP traffic onto its IPNet via 0867-prefixed numbers is within the “policy objectives” of the Kiwi Share obligation (KSO).

“We received legal advice that this charge may be in breach of the requirement in Telecom’s KSO to maintain a local free-calling option for residential customers. Telecom’s advice differed from this” says the statement.

- Telecom had provided the ministers with assurances on a number of key points, says the statement. They include:

- Calls to 0867 will be free to residential customers so long as they are within the same local calling area;

- Calls to 0867 will be “of no worse quality” than “ordinary residential” calls;

- Telecom will monitor and publish details of quality issues.

“The government considers that while Telecom meets these assurances the policy objectives of the KSO are being met. This is because residential customers have a free local-calling option for making calls to ISPs to access the Internet.”

Information Technology Association (ITANZ) president, Peter Macaulay, says technically the ruling is correct.

“It most probably is valid – the charge is not on the consumer, it’s on the ISP. But the reality is that it’s a levy that will come back to the consumer.” Macaulay describes the move as “a very clever piece of skulduggery on Telecom’s part”.

Labour commerce spokesman Paul Swain is less complimentary.

“That’s a gutless way out from the Minister for Telecom. He clearly doesn’t understand the importance of the issue for the knowledge-based economy [KBE].” Swain says government unwillingness “to do anything” about Telecom reinforces his belief that the company needs investigating at the highest level. Swain has promised to launch an inquiry into Telecom’s overall business practice if Labour wins the next election.

“At the moment our regulatory body consists of Telecom and the High Court and that’s just not good enough.” Swain says the Crown Law Office ruling, that said the scheme may be illegal under the KSO, gave government the perfect opportunity to take a closer look at Telecom but it has thrown away the chance. “How can we call ourselves a [KBE] if we don’t even have the basic infrastructure in place to deliver it?” asks Swain.

Meanwhile the Commerce Commission, which launched an investigation into the numbering scheme, says it is still waiting for the complainant to provide it with information. Spokesman Vince Cholewa says it will be “some weeks yet” before its investigation is concluded.

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