Squabbles recede but big hurdle looms

By RICHARD BRADDELL

The Government's pre-Christmas policy on telecommunications might be viewed as about as moderate as could be expected, short of doing nothing.

It left Clear Communications disappointed at the lack of cost-based access to Telecom's local loop, and TelstraSaturn irked that it did nothing about access to data channels.

But Communications Minister Paul Swain defends the policy, if only because it establishes procedures for quick resolution of dusputes.

"I think the single biggest problem in the industry in the last 10 years - and I think the previous Government really did drop the ball on it - was in allowing disputes to drag on for months and years," he said this week.

And it is no coincidence that Telecom, which had the most to gain from protracted legal action, has identified this fast-tracked disputes system, which provides only limited rights of appeal, as the key area of its dissatisfaction.

The Government's regime will allow appeals to the courts on the commissioner's determinations only on points of law and procedural fairness. Otherwise, it will be impossible to challenge the decisions - which should eliminate the drawn-out and sometimes farcical economic theorising that characterised telecommunications litigation in the past decade.

Mr Swain expects the appeal system to be be vigorously debated at the select committee hearings, but as he sees it as a pivotal part of the reform that was "thought through very carefully," it seems unlikely the Government will yield.

Meanwhile, Mr Swain has to get the policy implemented. He hopes to have legislation in Parliament at the end of next month and enacted by August 31. If he worries that the existing parliamentary workload may delay enactment, then he sees other factors helping.

"There has been an enormous amount of consultation already and the issues have been thrashed over a long period of time and the framework we've established, in my view, will not be the major issue," he says.

But enacting the legislation is only the start. The whole system depends on having a commissioner who knows what he or she is doing. At the moment, Mr Swain has no idea who that person will be, the size of his or her team, salary or the nature of the industry funding that will be used to pay for the office.

"We are looking a little bit for a super person who understands the environment in New Zealand, who has an eye to where the future is going in competitive international telecommunications markets and can work through difficult politics in the industry," he said.

"Much will depend on the ability of the person to be able to work with the industry and have its confidence."

But finding that person will require some careful balancing.

Mr Swain agrees that the outcomes of the telecommunications inquiry (as well as the the one into electricity that ran shortly before) could have been largely predicted by examining the biases of the inquiry personnel.

So while he recognises that finding a commissioner who can see past his or her own competition ideologies will not be easy, he is adamant that the Government does not want someone so laid-back that he or she will rekindle the disputes of the past, nor a commissioner who is hellbent on regulation.

Meanwhile, Mr Swain has urged the industry to get on with the study into the economic efficiency of moving to number portability, which is to be undertaken under the controversial Number Administration Deed.

The absence of number portability - the ability to keep the same number when changing carrier - has allowed Telecom to discourage some business customers from transferring to new carriers.

Mr Swain said at the launch of the Government's policy, before Christmas, that he had been "totally frustrated with the lack of progress," and expected a speedy resolution. But his policy made it clear that the introduction depended on a positive economic assessment, even though it was to be a regulated service.

The deed was a creation of the previous Government, and while Clear says the economic assessment is asking the wrong questions, the company would support it under different terms of reference.

Mr Swain says he is uncertain what to do about the deed because it has not formed part of the present Government's policy.

But last week, he urged the industry's working party on the deed to proceed with its economic study, to avoid a six-month delay before another study could be commissioned under the new legislation.

Meanwhile, he is comforted that without legislation, the industry has experienced nine months of unprecedented progress in resolving industry deadlocks. He expects that to continue without undue recourse to higher authorities.

"I have said I don't want an endless stream of recommendations from the commissioner because the industry can't resolve things," he says.

With a disputes resolution mechanism operating, he doesn't expect that to happen.