add 0800 service calls to definition of prescribed services; and
delete international calls and leased services prices and discounts from definition of prescribed services, if information is provided showing these markets are now fully contestable.

for each call zone specified in the OECD business telephone service tariff model, disclose the average business national calls price, net of any discounts, for user call data which broadly fits within the OECD user profile;
for each call zone specified in the OECD residential telephone service tariff model, disclose the average residential national calls price, net of any discounts, for user call data which broadly fits within the OECD user profile;
disclose the average business telephone service rental price net of any discounts;
disclose the method used to calculate the averaged tariff data; and
disclose the data twice yearly.

remove requirement to publish any changes to prescribed services tariffs quarterly and to make the information available at Auckland, Wellington, and Christchurch offices (except for discounts greater than 10 per cent);
remove requirement to publish prices and terms of condition of supply at end of September in each alternate year from 1990 on;
disclosure to be by amendment to relevant part of Telecom's List of Charges (TLOC) within one month of any change to a prescribed service;
TLOC copies of all changes to be provided concurrently to the Secretary of Commerce;
require Telecom to maintain a list of current prescribed services in TLOC; and
encourage Telecom to publish TLOC and changes on internet.

Interconnection Agreements

define the KSO to cover all residential telephone lines, residential directory services, directory listings and emergency call centres supporting emergency telephone numbers;
require Telecom to disclose:

Any losses incurred in complying with the KSO, including details of: (i) the amount of the losses that are attributable to each component of the KSO; and for each of these components, (ii) the amount of the losses that are attributable to individual customer groups.
The way it recovers the KSO losses, including: (i) the sources (internally and externally) that Telecom recovered these losses from; (ii) the amounts that Telecom recovered from each of these sources; (iii) and the components of any charges (internal or external) that Telecom uses to recover these losses from.

The cost of the KSOs is the unavoidable net losses incurred by an efficient operator in providing the KSO-mandated services to the customers or groups of customers required.
The net cost calculation must be based on objective, transparent, non-discriminatory and proportionate procedures and criteria.
The net cost calculation should identify the cost, less revenues and associated benefits of providing services covered by the Kiwi Share obligations, to a customer or group of customers.
When calculating net cost, a quantification of the intangible benefits of being New Zealand's only universal service provider, an implicit requirement of the KSOs, should be added on the benefit side;
The net costs of emergency services, directory services, directory listings and the provision of special equipment or services must be identified separately;
No account may be taken in calculating the net cost of Kiwi Share obligations of obligations which are outside its scope other than those specifically included.

require Telecom to publish an audited calculation of its KSO costs twice yearly in conjunction with the publication of its financial statements under the financial information disclosure regime;
require Telecom to disclose the full methodology used for calculating the above information (including any models used); and
require Telecom to retain all data, including calculation models and associated documentation, for at least seven years.

require Telecom to also disclose any operating agreements, side letters and associated documentationof any interconnection agreement.

amend requirement to publish full text of any interconnection agreement within 30 days of the end of the quarter in which agreement is reached to "within 15 working days of the completion of an agreement";
remove requirement for agreements to be available at Auckland, Wellington and Christchurch offices;
require agreements to be available at Telecom's Head Office and at a site on the Internet maintained by Telecom; and
remove requirement for updated disclosure of current interconnection agreements every two years.

Financial Information

remove requirement to disclose twice yearly financial statements relating to Telecom New Zealand Ltd;
require Telecom to publish twice yearly, within three months of the end of the financial year, and within three months of the end of the first half of the financial year separate audited financial statements for its "local loop" and "other telecommunications" businesses, including specified performance measures and reconciling with the accounts of Telecom Corporation of New Zealand;
require Telecom to prepare the financial statements on the basis of the avoidable cost allocation methodology and to comply with generally accepted accounting procedures, with the separate businesses to be regarded as independent and unrelated companies.

define the "local loop" as the provision, support and maintenance, including as relevant the necessary billing, sales, marketing, fault reporting and repair etc, of the following telecommunications services:

telecommunications circuits, including telephone access circuits, between customers premises and the Telecom network;
telecommunications switching between local telephone exchanges in the same local calling area including transmission between exchanges;
telecommunications switching between local telephone exchanges and the long distance calls network access point in the local calling area;
telecommunications value added services which are either primarily supported by local telephone exchanges or are provided as an integral component of telephone service, and for which there are no widely available competitive alternatives. At present this would include directories and some value added products.

require the financial statements to be prepared on the basis of the avoidable cost allocation methodology (ACAM);
require Telecom to disclose the full methodology used for preparing the financial statements (including any models used, all significant assumptions and estimates underlying the calculations, and the nature of, reasons for and financial impact of any changes in methodology); and
require Telecom to retain all data, including calculation models and associated documentation, for at least seven years.

require Telecom to disclose all material transfer payments between the local loop and other telecommunications businesses, including:

a detailed description of the good or service provided;
the price and quantity and/or frequency of each good or service provided (both the unit price and the total amount paid per year would be required);
the terms of the payment for each good or service provided;
the period during which the good or service was provided.

require Telecom to disclose the following costs, revenues, assets and liabilities in its financial statements:

all material transfer payments;
a range of significant items as detailed in Annex 3;
those items which form the basis of the financial performance measures; and
all items that are of such a size, nature or incidence that their disclosure is necessary for understanding of the business.

Printed: 26/11/2009