TelstraClear wants cost of levy spread

By PAUL BRISLEN

Companies that run their own phone networks and connect with Telecom could be liable to help pay for the Telecommunications Share Obligation (TSO) if a proposal before the Commerce Commission is accepted.

The commission is hearing submissions on the TSO and the mechanism by which the various "liable persons" pay their share of the costs.

TelstraClear, one of the eight liable persons, has recommended the commission review its interpretation of the definition of such liability to include more companies.

Government relations manager Grant Forsyth said: "The TSO is a tax on the industry and, in general, the wider the tax base the more equitable it is."

The Telecommunications Act defines a liable person as a company that provides "telecommunications services to end-users in New Zealand by means of a component of a [public switched telephone network] PSTN that is operated by the person and is interconnected with Telecoms PSTN".

The commission had decided that only eight companies met the bill - TelstraClear, Vodafone, Compass Communications, CallPlus, Equant, WorldXChange, TeamTalk and Ihug.

However, Forsyth said the definition was broadly worded and other telcos and internet providers should also be included.

"It's a bit like an onion, you peel back one layer and there's another layer you could also consider underneath."

Counties Power chief executive Neil Simmonds believes the definition could extend beyond the telco market into potentially every large company in New Zealand.

"What about the Crown? Social Welfare has its own switch and has end users and they can connect with Telecom's network," he said.

"Will they get a bill? Will the Herald?"

Counties Power was identified by TelstraClear as a company that could be liable for a share of the TSO costs as it runs a wholesale broadband network in the Auckland region.

In its draft determination released in June, the commission estimated the TSO costs at $62.6 million.

The TSO agreement between the Government and Telecom replaced the Kiwi Share provision and requires Telecom to provide free local calling, line rentals tied to the consumer price index and low speed internet access.

The commission estimates there are 62,995 "commercially non-viable customers" and the cost of maintaining those customers on the network is shared between the liable persons.

The commission's hearing into the TSO draft determination finishes this week and a final report will be released later in the year.

Cost counting

* TSO conference reviewing the cost of providing the "Kiwi Share".

* Eight telecommunications companies are liable to help pay for TSO.

* Commission says there are 62,995 "commercially non-viable customers".

* Commission estimates costs of maintaining those customers at $62.6 million - the costs to be split between "liable persons".

* TelstraClear claims other telco providers should be liable for share of the cost.