UFB legislation gives Telecom a ‘free pass’, Vector says
Legislation governing the rules of the government’s $1.35 billion roll-out of ultra-fast broadband will give Telecom Corp. a free pass,†according to rival bidder Vector Ltd.
Vector chief executive Simon Mackenzie told Parliament’s Finance and Expenditure Committee the Telecommunications (TSO, Broadband and Other Matters) Amendment Bill would give free rein to the dominant Telecom.
The supplementary order paper tabled by Communications Minister Steven Joyce last month would leave Telecom free to acquire any other local fibre company or telecommunications firm without regulatory oversight by the Commerce Commission, enabling an unregulated copper business to price in a predatory manner,†Mackenzie said.
It’s really important that Parliament and the rest of New Zealand recognises the supplementary order paper bestows significant market and competition benefits to Telecom and does so when not required,†he said. If Telecom sees separation as an issue for its bid, then surely that’s Telecom’s issue.â€
Simon Fuller, chairman of the New Zealand Regional Fibre Group, told the committee Telecom would get special treatment from the SOP over how it would structurally separate, as it would decide how to reallocate its assets and liabilities between the two entities. He said he was concerned that the minister wouldn’t see the phone company’s proposals for 40 days, essentially making it a fait accompli.
With the minister’s office running the stream of a potential Telecom demerger, the Regional Fibre Group was worried Crown Fibre Holdings’ negotiation with the phone company was under the assumption it would separate, but with no detail about how that would occur.
The bill and SOP were intended to ensure Telecom can’t build a dominant position in the telecommunications environment that will emerge as fibre-optic cable and wireless services gradually replace today’s copper-based telephone networks. Telecom has made it to the priority list to win a chunk of government funding, along with Vector and some of the Regional Fibre Group’s members.
Vector wants a calmer approach on regulation, with the principles established by industry and government at the start of the process. That would give capital markets and rating agencies more confidence around the future certainty of the regime, as would a bipartisan approach to the legislation.
The issue of forbearance, which essentially excludes regulatory oversight of the winning bids, initially offers some certainty, but that may falter as longer-term issues emerge, he said. The view to front-load regulation in principle was endorsed by the Regional Fibre Group.
Antony Royal, a spokesman for unsuccessful rural broadband bidder Torotoro Waea, told the committee it appeared there was a lack of vision on the part of the government as to what the end-game is.
My worry here is that we’re going down a really fast track of trying to stitch what we have together to try and make something work without actually figuring out where we actually want to go in the long term,†he said. I think that we have missed an opportunity to really look at where we’re going in telecommunications in the future.â€
Telecom pushes out time of split of network arm
Telecom Corp., which is in the box seat to win the lion’s share of the government’s $1.35 billion roll-out of high-speed broadband, has pushed out the timeline to carve out its network business.
Chief executive Paul Reynolds said the target of structural separation by the end of June has been extended as it continues talks with the government’s Crown Fibre Holdings. Telecom was named a priority bidder for 25 regions, including Auckland, in December in what’s been a protracted negotiation with the government, and has offered to demerge its Chorus unit, which owns the fibre cable and copper line networks, from the service delivery unit.
Paul Richardson, who helps manage $300 million in equities for BT Funds Management, said the consensus view is that if Telecom has to split to be a part of the government-subsidised fibre roll-out. That’s probably one of the better outcomes†and should be heartening for Telecom, which will have to sell the demerger to shareholders to get it across the line.
The company is in a very difficult position if it does not contemplate some sort of structural move to form part of the broadband rollout,†Richardson said. If it is outside the fibre project it will be very difficult to defend its patch, so that’s a risk to the company.â€
In return for splitting its business, Telecom has indicated it expects substantial regulatory relief from the requirements imposed on the copper-wire service. Last month the Commerce Commission recommended some reprieve on the regulation of limited bundles that are resold by the phone company’s rivals.
The shares rose 0.4% to $2.28 in trading today, and have gained 4.2% so far this year.
Mobile users to get economical phone calls (New Zealand)
Commerce Commission has recommended a considerable cut in the termination fee that telecom companies charge each other for using their networks. The Commerce Commission is recommending a drop in price from around 17 cents to 4.6 cents a minute on April 1, and to 3.9 cents per minute by April 2014.
According to the Commission, this is justified because of the unique market conditions in New Zealand. It’s also necessary to remove a significant, long-standing and growing barrier to efficient expansion by a small mobile network operator.
The Commission is now seeking submissions on the draft recommendations and will release a final determination in March.
Commerce Commission confirms six-year MNP extension (New Zealand)
The Commerce Commission of New Zealand has confirmed its decision to extend the existing arrangement for local and mobile number portability (LMNP) for a further six years.
On 31 August 2005 the Commission issued an initial determination on LMNP multi-network services, but this determination was set to expire on 19 December this year. The new draft determination continues the standards and systems set out in the original determination, extending portability requirements until December 2016.
According to Telecommunications Commissioner Dr. Ross Patterson, recent figures released by the Telecommunications Carriers’ Forum (TCF) show that half a million consumers have ported their numbers since number portability was introduced in April 2007, with 170,000 numbers ported in the last year. Number portability enhances competition in telecommunications by allowing customers to easily change providers while keeping their existing telephone number. This saves them the inconvenience, time and expense of updating all their friends, family and colleagues of new contact details every time they change providers. These issues can have a major impact on people’s decision to switch service providers.
Vodafone begins new roaming deal with 2degrees (New Zealand)
The Commerce Commission has announced that it will not investigate whether the national mobile roaming service should be extended to include price, because there are adequate commercial arrangements in place.
2degrees has sought the investigation, marking national roaming charges a barrier to expansion. Outside Auckland, Wellington, Christchurch and Queenstown, where it has built its own network, 2degrees customers roam on Vodafone’s network.
According to Telecommunications Commissioner Ross Patterson, 2degrees has now advised the Commission that they have concluded alternative arrangements with Vodafone that enable 2degrees to carry out its business on a more equitable basis. As a result of this new arrangement, 2Degrees believes that it is not currently appropriate for the Commission to launch an investigation into whether national roaming should be a designated service.
MTA regulation recommended by New Zealand regulator
www.WirelessFederation.com/news: Recommendation on mobile termination access (MTA) services regulation has been changed by the New Zealand Commerce Commission which has now recommended the communications minister to regulate mobile termination access services, and not accept undertakings from Telecom and Vodafone.
Earlier, the commission recommended the minister to accept the undertakings and not regulate MTA services. It also informed the minister in April that the new retail offer launched by Vodafone may have the potential to affect the basis for its recommendation.
According to telecommunications commissioner Ross Patterson, the on-net retail pricing component of Vodafone’s new Talk add-on plan, offered since the final MTA report, perpetuates the barrier to expansion that the final undertakings, if accepted by the Minister, were designed to remove.
Submission of the drafts reconsideration report is now invited by Commission which can now be lodged by May 19.
New Zealand govt asks ComCom to reconsider mobile ruling
www.WirelessFederation.com/news: The Commerce Commission (ComCom) of New Zealand has been asked by the country’s Communications and Technology Minister Steven Joyce, to reconsider its recommendation on mobile termination access services.
In February, final report on mobile termination access services was received by the minister in which he was recommended to accept offers put forward by Telecom Corp of New Zealand and Vodafone New Zealand in lieu of regulation.
However, a new retail offering launched by Vodafone in April has been noted as ‘may be material’ by ComCom and could affect the basis for its recommendation. In response, ComCom has been asked by Joyce to consider any relevant retail offers since the report was sent, or that may be released before the commission finalizes its reconsidered advice.
This has been done to determine the implications they have on their recommendation that he accept the undertakings put forward by the two companies.
Vodafone’s new offer to be scrutinized by Commerce Commission
www.WirelessFederation.com/news: Commerce Commission recommendation on mobile termination can have implications form new Vodafone offer allowing customers to call Vodafone mobiles or landlines for up to 200 minutes for a flat $12 a month on certain pre-pay plans.
In February, Minister for Communications and Information Technology was recommended by the commission to accept undertakings from Telecom and Vodafone on mobile termination as an alternative to regulation.
But now, as per the commission, it had invited the minister to consider the launch of Vodafone’s Talk Add-on product in his assessment of whether Telecom’s and Vodafone’s mobile termination access services (MTAS) undertakings should be accepted.
According to Telecommunications Commissioner Ross Patterson, the commission’s initial view was that a plan such as Vodafone’s new Talk Add-on product, and any market outcomes which may arise from it, may be material.
Vodafone New Zealand’s appeal against Telecom to be heard by SC
www.WirelessFederation.com/news: New Zealand’s Supreme court decision has been welcomed by mobile operator Vodafone New Zealand in which it has agreed to hear telco’s appeal on whether fair calculation of the amount it paid Telecom Corp. of New Zealand Ltd. for providing telecommunication services to non-commercially viable customers between 2003 and 2004 was done or not.
According to Vodafone spokesman Paul Brislen, Vodafone welcomed the decision to have its appeal heard but could not speak further about the particulars of the case because it was before the court and several other court cases involving other periods were also before the court. No comments have been given by Telecom yet.
Commerce Commission method to calculate the cost of providing this service has been questioned by Vodafone who wants to recover the nearly NZ$11 million paid to Telecom for this period.
Telecom might have to repay millions of dollars to other telecom companies in New Zealand if Vodafone’s appeal is granted.
