Introduction
Scope of the Review
1. The Telecommunications Act 2001 (the Act) established an access regime the purpose of which is to promote competition in telecommunication markets by regulating the supply of certain telecommunications services between service providers. This regime is the key mechanism that the Government is relying on to spur further competition in telecommunications that will deliver lower priced services to end-users over time.
2. A recent benchmark report on the comparative performance of New Zealand's telecommunications regime1 concluded that in general New Zealand's relative performance in most categories required improvement.
3. The regulatory provisions of the Act have been or are currently being used to regulate the supply of a number of telecommunications services. For example the Commerce Commission (the Commission):
- has completed determinations using the initial pricing principle for the supply of fixed network interconnection, retail wholesale services (excluding price capped services), and residential wholesale services, and it is working on pricing review determinations which will establish the price for these services using the final pricing principle;
- has completed the local loop unbundling review and following the Minister of Communications' acceptance of the Commission's recommendations, the introduction of Internet-grade bitstream unbundling and unbundled partial private circuit provision is now proceeding;
- has determined the net cost of the TSO for the financial year ended June 2002 and is now working on determining the net cost for later years;
- is investigating the case for regulating mobile termination and plans to provide a final report on the need for regulation early in 2005;
- is currently considering the Telecommunications Carriers' Forum's Draft Code for Co-location of Radiocommunications Services with the objective of approving it under the provisions of the Act;
In addition the Telecommunications Carriers' Forum has:
- prepared draft codes on Local and Mobile Number Portability (LMNP) that set out operational procedures and processes, and a "Network Code" that provides guidance on the development of acceptable network solutions. The codes have yet to be forwarded to the Commission for approval.
4. Experience obtained in the Act's operation has identified a number of issues that justify a review of the Act with a focus on implementation issues.
5. The primary purpose of the implementation review is to fine-tune the processes under the Act and to provide clarification, where necessary, of definitions and interpretations. A particular focus of the review will be monitoring and enforcement of the prompt implementation of agreements for the supply of regulated services. The review may identify both potential legislative and non-legislative initiatives that could improve achievement of the Act's objectives.
6. The general areas that the review will consider are:
- improvements to the process for resolving the key terms and conditions for new or improved designated services, designated multi-network services or specified services, including monitoring and enforcing the prompt implementation of new or improved regulated services;
- improvements to the Schedule 3 procedure for adding, altering or extending the term of regulated services including providing a mechanism to enable the Commission to take into account the Government's wider policy objectives;
- improvements to aspects of the Telecommunications Service Obligation (TSO) regime processes;
- improvements, clarifications or amendments that would better support the achievement of the Act's objectives including processes for monitoring the performance of the regime; and
- establishing a simple mechanism to better assist in facilitating resolution of users' telecommunication service performance concerns.
7. Issues excluded from scope of the review are:
- the role of the Commission in implementing the Act;
- changes to the Act's Section 18 Purpose Principle including directions on the weighting of economic efficiencies;
- consideration of the need to regulate further services or amend existing services by legislating to amend Schedule 1 of the Act;
- consideration of the extension of the expiry date of existing services regulated under Schedule 1 of the Act (other than by use of the process provided in the Act);
- consideration of changes to the Act to enable regulation under Schedule 1 in the absence of a recommendation from the Commission;
- changes to the liable person definition which would have the effect of making persons who do not operate a PSTN, liable for a proportion of the net cost of any TSO instrument;
- consideration of Part 4 Network issues including telecommunications access to power lines;
- the need for a Telecommunications Services Industry Ombudsman; and
- introduction of information disclosure requirements in respect of retail service pricing and financial accounting matters.
Timetable for the Review
8. The review will be undertaken to the following timetable:
- closing date for receipt of submissions on review by 4 February 2005;
- publish submissions on the MED website and invite cross-submissions with closing date for receipt by 4 March 2005;
- report to Cabinet May 2005.
Confidential Information
9. Respondents should note that written submissions or comments provided to the Ministry of Economic Development on the discussion paper will be subject to the Official Information Act 1982 (OIA). The OIA requires the information to be made available unless there is good reason, pursuant to the Act, to withhold the information; and that good reason outweighs the public interest in making the information available.
10. The grounds for withholding any information are set out in the Official Information Act. If you object to the release of any material provided in your submission, please specify the material that you wish withheld, and the grounds for withholding. All such requests will be reviewed carefully in considering any request for release of the submission. The decision on whether to release the material under the terms of the OIA rests with the Ministry of Economic Development. Any decision to withhold information is subject to appeal to the Ombudsman.
11. Any confidential information provided in a submission must be clearly marked along with the ground(s) for withholding, and the submission should also provide a non-confidential copy.
Contact Address for Review Submissions and Comment
12. Any submissions or comments on the discussion paper are to either be provided in writing and in a suitable electronic format to:
The Manager
Information Technology and Telecommunications Policy
Ministry of Economic Development
PO Box 1473
Wellington
or alternatively submissions or comments on the discussion paper can be emailed in a suitable electronic format to: TACTreview2004@med.govt.nz
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