Wanted: a regulator to press the buttons

By RICHARD BRADDELL

WELLINGTON - Businessman Hugh Fletcher's telecommunications inquiry has pulled few punches in its draft report which recommends that the industry be regulated by its own commissioner.

Mr Fletcher said the inquiry was open to persuasion during the next round of submissions and public hearings which ends with a final report to the Government in September.

But he said the preliminary view was that the generic competition law was not sufficient, and the complexity of industry regulation put it beyond the scope of the Commerce Commission, although that implied no criticism of the commission.

According to Mr Fletcher, the report's philosophy is to promote competition in telecommunications and to extend the benefits of better priced telecommunications to the widest range of users.

In addition to an industry-funded regulator, known as the Electronic Communications Commissioner, the inquiry has recommended that the Kiwi Share obligation that requires Telecom to provide free local calling should be enshrined in statute.

It says the Kiwi Share should be clarified so there is no doubt that it includes local low-speed internet connections.

It has also recommended that Telecom be required to present an annual plan on its intentions to upgrade the 95,000-odd rural lines to basic internet capacity.

Under the commissioner would sit an industry-financed electronic communications forum, made up of registered industry members whose role would be to resolve issues as they arose.

In a reflection of the convergence between telecommunications and other electronic media, registration would be compulsory for registered telecommunications and broadcast network operators.

In the event of its failure to reach agreement on appropriate solutions, the commissioner would have the power to "designate" services that would be regulated as necessary.

While the right to seek judicial review of the commissioner's rulings on legal grounds would exist, appeals to the courts on the substantive issues underpinning the commissioner's decisions would not be allowed.

An initial list of designated services would include:

Carrier interconnection with the requirement that it be "any to any."

Wholesaling of Telecom's local loop and of mobile services to a new entrant before a network buildout.

Mandatory roaming between compatible mobile networks and co-location on cellsites.

Asked if the inquiry's recommendations had come "after the horse had bolted," Mr Fletcher said the horse was still very much in the process of bolting given the rapidly evolving industry and its technologies.

Inquiry co-member, lawyer Cathie Harrison, said telecommunications was entering a new phase that was critical in areas such as e-commerce and e-government.

"With the move to wireless technology and high-speed data access, there are enormous changes there in the near to medium-term and there will be a lot of different issues that arise out of that context," she said.

Broker Ian Waddell, of Ord Minnett, said: "It [the report] seems reasonably benign."

Bruce Parke, Telecom's general manager of industry and government relations, said having a commissioner would stop people looking for commercial, win-win solutions.

Instead, they would bring the commissioner in early.

But he said the report looked reasonably balanced on the Kiwi Share, and Telecom was not uncomfortable with provision of free internet calls provided there were "reasonable" interconnection agreements with internet service providers.

Mr Parke limited Telecom's response as he wanted to see details.

Communications Minister Paul Swain said the Government would wait for the final report before considering its response on the issue.

Submissions on the draft are due by July 24 and the public then has until August 9 to make cross-submissions.

Public hearings are scheduled to start on August 14.