KEY POINTS:
Telcos are pushing the Government for the chance to provide services to hard-to-reach phone customers instead of having to pay Telecom to service those consumers.
A long-awaited Government report outlining potential reforms to the telecommunication service obligations (TSO) was released this week and many phone companies say they
want an opportunity to service rural customers.
The TSO is the agreement made when Telecom was privatised 17 years ago to guarantee free local calling in all regions.
The head of government relations at Vodafone, Roger Ellis, said the TSO had become a tax on competition.
While he acknowledges that was not the intended objective, the TSO levies created a disincentive to build a competing network.
Ellis called for a "technology neutral" approach which would meet the basic requirements of genuinely non-commercial customers using the most suitable technology - whether that be satellite, WiMAX, cellular 3G or landlines.
CallPlus chief executive Martin Wylie agreed, saying providing services to hard-to-reach customers should be open to some form of tender.
"The costs that we're being required to pay to Telecom by way of a subsidy clearly were out of order and if you used a more appropriate and up-to-date technology somebody more appropriate would do it for a lot less," said Wylie.
Kordia's Suzy Stone said the industry was moving away from an expectation that rural customers would be served off the copper network.
"There's the technologies [Kordia] deploy and the technologies that other companies deploy that could equally do it," said Stone.
TelstraClear's regulatory group manager, Chris Abbott, said the notion of the TSO was good and there should be universal access to telephone services regardless of whether the customer was in an urban or rural area.
However, TelstraClear has concerns over how the commission calculates the cost of serving non-commercially viable customers.
Abbott said the model used by the commission did not incorporate new network technologies.
"The commission's calculation is deficient and because of that deficiency it overstates the cost and imposes cost on players such as TelstraClear and Vodafone," said Abbott.
Draft determinations calculating the cost Telecom incurs meeting the TSO came to $71.4 million in 2005 and $78.3 in 2006.
About 69 per cent of the cost would be borne by Telecom and the remainder by other operators, primarily Vodafone and TelstraClear, the commission said.
Telecommunications Users Association head Ernie Newman said although the discussion document was on the right track he was disappointed it had taken so long for the Government to release something that was nothing more than a list of expanded questions.
"We have far too much catching up for that sort of thing to happen," said Newman. "There's got to be a greater sense of urgency from the whole process."
Communications Minister David Cunliffe announced in May last year the TSO would be reviewed as part of sweeping reforms to the telecommunications sector.
Telecom spokesman Mark Watts said the discussion document emphasised the changing telecommunications environment.
FAIR SHARE
* The TSO is an agreement introduced before Telecom's 1990 privatisation to retain affordable access to residential phone services by rural and urban customers alike.
* It was originally called the Kiwi Share but renamed in 2001 when revised to include dial-up internet services.
* The Government announced last May it would review the TSO and update it for the new competitive environment.
* This week the Ministry for Economic Development released a discussion document to canvass opinions on the TSO, due by the end of next month.
