The Telecommunications (Disclosure) Regulations 1990
[ Last Updated 15 November 2005 ]
TELECOMMUNICATIONS INFORMATION LEAFLET NO. 4
March 1994
INTRODUCTION
The objective of the New Zealand Government is efficient markets in telecommunications goods and services. To this end, the Government has adopted policies and promoted statutory measures to facilitate competitive entry into those markets and to maintain the conditions for effective competition.
This information leaflet describes one of the measures designed to facilitate effective competition - the Telecommunications (Disclosure) Regulations 1990 (as amended by the Telecommunications (Disclosure) Regulations 1990, Amendment No.1).
BACKGROUND
The New Zealand telecommunications market was completely deregulated, with effect from 1 April 1989 and from that date there have been no statutory barriers to entry. The Government recognised that, at present in certain segments of the market, there was no effective competition to the Telecom Corporation of New Zealand Limited. As a result the Government decided to impose certain information disclosure requirements on Telecom.
The purpose of the requirements is to facilitate effective competition in the provision of telecommunication goods and services. Competitive markets generate information which enables the public to choose suppliers; commercial firms to monitor the behaviour of competitors; and potential new entrants to assess market prospects. In markets where competition is limited or even absent, there are fewer checks on the conduct of the dominant firm, and customers, competitors, and potential new entrants have insufficient planning information. Information disclosure requirements can correct for this deficiency, and consequently form an important part of the Government's competition policy.
Information disclosure requirements also provide a check on Telecom's pricing conduct. Telecom is the dominant telecommunications provider in New Zealand and is likely to remain so for many years. In some market segments, particularly the local loop operating activities, Telecom is a natural monopoly. That is, even though market access is unrestricted, widespread competition is most unlikely in the near future. In other market segments, competition is expected to emerge over time. The information disclosure requirements can assist monitoring to assess whether Telecom is making unreasonable profits, or engaging in predatory or unfair price discrimination.
The Telecommunications Amendment Act 1990 amended the Telecommunications Act 1987, principally by inserting sections 5C, 5D, and 5E. Section 5C established regulation making powers which can be used to impose information disclosure requirements on Telecom Corporation of New Zealand Limited and its subsidiaries. Section 5D requires Telecom to provide the Secretary of the Ministry of Commerce with information including full details of contracts, on request, to ensure compliance with the information disclosure requirements. Section 5E establishes offence provisions and penalties for non-compliance with the Regulations.
THE REGULATIONS
The regulations, titled the Telecommunications (Disclosure) Regulations 1990, came into force on 1 July 1990. Following a review of the Regulations in 1993, conducted by the Ministry, the Regulations were amended, by the Telecommunications (Disclosure) Regulations 1990, Amendment No.1, with effect from 30 December 1993.
- There are two categories of information to be disclosed:
- financial statements; and
- the prices, terms, and conditions of certain prescribed goods and services.
The regulations require Telecom to publish separate, audited financial statements (profit and loss accounts, and balance sheets, together with a statement of accounting principles) for its principal operating subsidiary company, Telecom New Zealand Limited, as if it was an independent and unrelated companies. (Originally Telecom was required to publish the accounts of each of its four Regional Operating Companies, but these were amalgamated in 1993.)
Publication commenced with the ROC accounts for the first half of the financial year which began on 1 April 1990. These financial statements were available in December 1990. This information will continue to be available on a Half-Yearly (in December), and Annual (in June) basis.
As well, Telecom must publish the prices, terms and conditions for the supply of certain prescribed telecommunication goods and services. The following goods and services have been prescribed:
- Access to the public switched network operated by Telecom;
- Interconnection to a network owned and operated by Telecom for the purposes of operating any other network, whether or not owned or operated by Telecom;
- Leased circuits; and
- Telecommunication links that enable the making of -
- telephone calls within Telecom's free calling area; and
- telephone calls to places outside Telecom's free calling area; including national and international toll calls.
Under the 1993 Amendment, Telecom is required to disclose the actual terms and conditions of its interconnection agreements.
The first publication covered the calendar quarter ending 30 September 1990, and this information was available in October 1990. This publication provided a comprehensive summary of Telecom's prescribed services. Within 30 days of the end of each subsequent calendar quarter, Telecom is obliged to publish an update of changes which have been made during that quarter. Every two years, Telecom is required to publish a complete summary of the prices, terms, and conditions of the prescribed services.
The information was originally published in the Gazette, but since December 1993 the information has been available directly from Telecom. As soon as practicable after the publication in the Gazette, Telecom is required to make the information available on request at its principal offices in Auckland, Wellington, and Christchurch.
In addition Telecom is required to furnish a complete set of the information to the Secretary of Commerce, together with a statutory declaration, made under the Oaths and Declaration Act 1957 by the appropriate company secretary, attesting that the information complies with the relevant regulation.
NOTE
The above description outlines the Telecommunications (Disclosure) Regulations 1990 (as amended). It is intended as an information leaflet, and is not a substitute for reference to the precise wording of the relevant statutes and regulations, or for professional legal advice.
The Regulations (1990/120 and 1993/380), may be purchased from Bennett's Government Bookshop, PO Box 5334, Lambton Quay, Wellington.
Requests for the publications should be directed to Telecom, either by contacting a customer services manager (dial 120 or 123), or by contacting
The Manager,
Corporate Policy Department,
Telecom New Zealand Limited,
PO Box 570,
Wellington
Telephone (04) 498 9460,
Fax (04) 473 5927.
The Regulations are administered in the Communications Division of the Ministry of Commerce. Inquiries about these regulations may be directed to
The Manager
Telecommunications Policy
Communications Division
Ministry of Commerce
PO Box 1473
WELLINGTON
New Zealand
Telephone: (04) 472 0030
Facsimile: (04) 499 0797
Communications Division
Ministry of Commerce
Information correct as of March 1994
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