| Q. | Why is it necessary to hold an Inquiry into telecommunications? |
| A. | The telecommunications industry is vital to the development of the information economy, so it is critical that New Zealand has a regulatory environment that delivers internationally competitive telecommunications services.
New Zealand’s light-handed approach to regulation of the telecommunications sector is different to that adopted elsewhere in the world. This has contributed to many New Zealanders questioning whether they are paying too much for their telecommunications services.
We now need a proper independent assessment of the current regulatory regime for telecommunications and advice on what aspects need changing. The Inquiry is the vehicle the Government has chosen to provide this. |
| Q. | What is the Government’s objective for the telecommunications sector? |
| A. | The Government wants to ensure that New Zealand has a telecommunications sector that delivers competitive and innovative services of a high quality, and that these services are delivered on an ongoing and fair basis to all New Zealanders who need them. |
| Q. | What will the Inquiry cover? |
| A. | While the broad aim of the Inquiry is to assess the extent to which the current regulatory regime meets the Government’s objective for the telecommunications sector, there are specific issues that the Government would like examined. These include:
- The environment for interconnecting competing suppliers with Telecom’s network.
- Telecom’s Kiwi Share Obligations.
- Telephone number portability and administration.
- The management of Internet traffic.
- Developing New Zealand as an information economy.
- A range of other competition issues.
The full terms of reference for the Inquiry, also being released today, give more detail. |
| Q. | Who will run the Inquiry? |
| A. | A three person team has been appointed to undertake the Inquiry.
The Government has been fortunate in securing the services of an impressive team, chaired by Hugh Fletcher, the former Chief Executive of Fletcher Challenge.
Allan Asher, Deputy Chair of the Australian Consumer and Consumer Commission (ACCC), who has extensive experience in competition and consumer issues, will also join the team.
The third team member is Cathie Harrison, who has valuable legal experience working on competition and telecommunications issues. |
| Q. | What process will the Inquiry follow? |
| A. | The exact process to be followed by the Inquiry will be decided by the Chair in consultation with the other members of the Inquiry team. However, it is envisaged that after some preliminary consultation with the major players in the telecommunications sector, the Inquiry will produce a draft report that assesses the current regime and suggests options for reform.
It is envisaged that submissions on the draft report will be called for and public hearings will also be held. This input would then be used in producing the final report to be presented to Government. |
| Q. | When will the results of the Inquiry be known? |
| A. | The Inquiry will begin work immediately. It has been asked to report to the Minister of Communications by 29 September. It is expected that the Inquiry report will be made available to the public shortly thereafter. |
| Q. | What happens then? |
| A. | If the Inquiry concludes that the current telecommunications regulatory regime could be improved, it is required to make detailed recommendations to this effect. The Government will then need to consider the Inquiry team’s recommendations and decide on how best to proceed. However, the Government would like to see any changes introduced at the earliest possible opportunity. |
| Q. | Does the public have any role in the Inquiry? |
| A. | The Inquiry will be seeking submissions from all interested parties, including consumers and providers of telecommunications services. It is envisaged that a draft paper on options for reform will provide a focus for submissions. Written submissions will be invited but the Inquiry is likely to also hold public hearings in the main centres. Details will be made available on the Inquiry website www.teleinquiry.govt.nz. |
| Q. | What will the Inquiry cost? |
| A. | The budget for the Inquiry is $802,000 (excluding GST). A contribution of $250,000 will come from the existing Commerce budget - $552,000 is new funding allocated by the Government. This is a relatively small budget for such a major project. It includes all direct expenses for the Inquiry, including fees, technical advice, costs of holding public hearings and travel. |
| Q. | How much are the Inquiry team members being paid? |
| A. | The Chairman will be paid $1,200 a day while the other team members will receive $900 a day. Inquiry team members will be paid only for the time they spend on Inquiry business. |
| Q. | Where will the Inquiry obtain technical advice? |
| A. | The Inquiry team will need to obtain technical advice to assist it in assessing the issues in the sector. Much of that technical advice is likely to be sourced from overseas. |
| Q. | Why is the Telecommunications Inquiry taking longer than the Electricity Inquiry? |
| A. | A longer time frame is needed for the Telecommunications Inquiry because it is envisaged that the Inquiry team will need to spend the first few months preparing a draft report on options for reform before seeking public submissions on that draft report. This period of time is needed because of the wide ranging nature of the terms of reference and the need to obtain technical advice. |
| Q. | The Electricity Inquiry panel is travelling overseas to study overseas regimes. Why isn't the telecommunications Inquiry team doing the same? |
| A. | The Government considers that the most effective way to proceed in telecommunications is for the Inquiry team, after developing a general understanding of the issues, to obtain technical advice to assist it in preparing a draft report. Technical advice is likely to include the experience of other countries and state-of-the-art thinking on telecommunications issues. The draft report will be released for public submissions.
The main industry players also have ready access to overseas advice and experience, and this is expected to be available to the Inquiry when it considers submissions on the draft report. |
| Q. | Will the Inquiry deliver lower phone bills for consumers? |
| There is some debate over how New Zealand’s telecommunications prices compare with the rest of the world. Nevertheless, the Government is committed to ensuring that New Zealanders have access to the best possible prices for telecommunications services and that all users are dealt with fairly and equitably. That is why the Government has established the Inquiry. |