Telecom's new numbering plan for Internet service providers (ISPs) has ramifications far beyond its impact on Internet users, says IT lawyer Craig Horrocks, of technical law firm Clendon Feeney.
"Telecom can see that it will eventually lose control of the numbering plan and that means it will lose control of distance-based charging," says Horrocks, who also writes the TechLaw column for Computerworld.
He believes the day is not far away where, instead of phone numbers, devices will be linked together using IP numbers. Current Internet protocol standards are evolving and the latest version to be adopted in the US (IP version 6) includes an open-line style connectivity. This means Voice over IP (VoIP) will have a better level of quality and can start to compete with regular telephony.
It will also mean phones, PCs and other devices will communicate with each other using IP numbers rather than the standard phone number. "There's an Internet phone available here today - that connects with an IP number instead of a phone number."
That poses a tremendous problem for Telecom - how to charge for long-distance calls if you don't know where the callers are.
"You can't tell where a telephone call is going to if it's just going to another IP address." That would spell the end to toll calls charged by distance and requires another pricing model.
"At the moment we've got a model of minutes multiplied by distance. If we say there is no distance in the equation, the implications are huge for Telecom."
Horrocks believes this is driving Telecom's desire to move Internet calling to a separate numbering system. It could then charge by the minute for connection and not worry about the distance part of the model.
Horrocks also addresses the issue of the Kiwi Share provision and how it is involved in Telecom's decision. "If Telecom claims that data usage isn't covered by the Kiwi Share, then it raises several issues that need to be addressed."
The first of those issues is that of who decides what is and isn't covered by Kiwi Share.
"This isn't Telecom's fault, it's the government's," says Horrocks, who believes the Kiwi shareholder, the government minister who is responsible for the share on behalf of New Zealand citizens, should take a more active role in the debate.
"If I were in charge of Telecom I'd do exactly the same thing."
The Kiwi shareholder is, according to Telecom's constitution, the Minister of Finance. That position has been filled by Bill English but was recently taken over by the soon-to-retire Bill Birch.
English's office says the day-to-day handling of telecommunication activities is managed by the Minister of Communications, Maurice Williamson. Williamson's office says the minister is "looking into" Telecom's move and will make a statement "at the appropriate time".
"We've received literally thousands of emails on the matter," says Williamson's press secretary, Peter Burdon. Birch's office was unable to respond to questions about the Kiwi Share before deadline.
"The Kiwi Share requires Telecom to maintain a free local residential telephone calling option," says Telecom communications manager Linda Sanders by email. The Kiwi Share document says: "A local free-calling option will be maintained for all residential customers" as one of the principles relating to "the provision of telephone services" (section 5.2, page 46).
Horrocks believe this move by Telecom is significant in that it will have ramifications for all local calling, not just Internet use.
"Is Telecom saying that the Kiwi Share refers to the physical system, the PSTN, or to the service that system provides?" asks Horrocks. If it is the service then surely, he argues, Kiwi Share does apply to Internet calling. If the Share only applies to the actual physical network that provides local calls then the Kiwi Share ceased to exist when Telecom first made changes to the infrastructure shortly after it was sold.
Sanders says Telecom has "strong legal advice" that "calls to the Internet are not covered by the Kiwi Share . Internet calls are not local telephone calls, however that term may be defined."
Section 5.3 of Telecom's constitution defines the terms "ordinary residential telephone service" and "local free calling option" to mean the "standard local telephone service provided to residential customers for the standard residential rental". No mention is made of what use the line will be put to, or what device connects to that line, says Horrocks.
Horrocks has co-authored an essay on the Kiwi Share provision and how it applies to Telecom's new numbering scheme. The report is available on Clendon Feeney's Web site at www.clendons.co.nz.