1. Executive Summary
1. The Government established the telecommunications information disclosure regime in 1990 to facilitate effective competition in the telecommunications sector.
2. The specific objectives set by the Government this year for the telecommunications information disclosure regime are:
- to ensure relevant telecommunications services pricing and interconnection agreement information is available to other service providers;
- to assist in efficiently valuing any Kiwi Share obligation (KSO) costs to Telecom, which entrants are required to contribute to through interconnection agreements;
- to assist in the efficient detection of anticompetitive behaviour and the identificationof any monopoly profits arising from monopoly components of Telecom's services; and
- to assist in the efficient monitoring of telecommunications industry performance over time.
3. The Ministry of Commerce (the Ministry) considers the prescribed services and the interconnection agreement disclosure requirements have broadly met their objectives. However, in relation to the costs of the KSO, a significant component of interconnection pricing, the Ministry proposes that Telecom be required:
- to disclose all losses incurred in complying with the KSO and the sources for recovering these losses;
- to disclose the methodology used for calculating all information; and
- to retain all data, including calculation models and associated documentation, for at least seven years.
4. The discussion paper also recommends some additional requirements and some possible deletions as follows:
- inclusion of 0800 call services, average national call tariff data, and average business telephone service rental tariff data as prescribed services;
- removal of international calls and leased services from prescribed services if it is clearly demonstrated that these markets are fully contestable;
- an additional requirement to disclose any side letters, operating agreements, any associated documentation of interconnection agreements;
- a requirement to publish the details of interconnection agreements in an earlier timeframe - within 15 working days of completion of such agreements; and
- other changes to publication requirements to make information more widely available and more timely.
5. The Ministry considers the current financial information disclosure requirements can be usefully strengthened to provide enhanced information for facilitating competition. It is proposed that Telecom be required:
- to publish twice yearly separate audited financial statements for its "local loop" and "other telecommunications" businesses;
- to prepare the statements on the basis of the avoidable cost allocation methodology;
- to disclose all material transfer payments between "local loop" and "other telecommunications" businesses;
- to disclose the methodology used for calculating all information; and
- to retain all data, including calculation models and associated documentation, for at least seven years.
6. The Ministry would have responsibility for monitoring Telecom's compliance with the regime. However, Telecom will be the public's point of access for information disclosed under the regulations.
7. A complete list of all proposed changes to the information disclosure regime is made in Section 7.
8. Industry participants and other interested parties are invited to comment on the proposed changes by 23 December 1998. Submissions should be made to:
Manager
Communications Policy
Resources and Networks Branch
Ministry of Commerce
PO Box 1473
Wellington
New Zealand
Fax 04-473 7010
9. Those making submissions are referred to the information about the Official Information Act and Privacy Act in Annex 1.
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