Free internet access limited in Telecom's new Kiwi Share deal

9.00 am

Limits have been put on free dialling for internet services in the new Kiwi Share agreement Telecom has signed with the Government, the company said today.

General manager, government relations, Bruce Parkes said Telecom was pleased to have completed the process of updating the Kiwi Share as one component of New Zealand's new framework for regulating telecommunications.

The updated Kiwi Share agreement went through Parliament yesterday as part of the Telecommunications Act.

Telecom and the Government have updated the Kiwi Share Obligations (KSO) on Telecom by signing a Telecommunications Service Obligations Deed which largely renews the KSO principles first established in 1990 when Telecom was privatised.

The new agreement extends the KSO so that it now includes dial up data services for residential customers as well as voice calling.

"In doing this, it has been important to define what those services are and what they are not. Certainly there are limits on what Telecom has agreed to provide within the local free calling option for local residential telephone service," Mr Parkes said.

Key elements of the updated KSO are:

* The local free calling option will continue, with Telecom able to offer optional packages of service on a geographical or customer segment basis

* Standard residential line rental will be not increase in real terms (after adjustment for inflation), "provided profitability in Telecom' s fixed line business is not unreasonably impaired"

* Line rental for rural customers will be no higher than standard residential line rental and local telephone service will be kept as widely available as it is in December 2001

* Dial-up data services cover both standard facsimile calls or standard internet calls, with the latter defined as calls made to internet service providers in order to access internet services of the kind generally available today

* Telecom can specify that standard internet calls must be dialled on 0867 or another number range. Internet calls that use other numbers may be charged for.

* Standard internet calls exclude a range of data services from the local free calling option. These services include interactive television, voice over internet protocol, video and online games services, and eftpos services and new services which depend on internet capability not already in common use

* Service standards for local telephone service will include minimum connect speeds of 9.6 kilobits per second (kps) and 14.4 kps for 99 per cent and 95 per cent of all residential lines respectively, with effect from December 2003

* Other service standards require Telecom to limit switch downtime and the incidence of dropped calls, and to maintain the 111 emergency calling service at or above specified levels

* There is provision for either Telecom or the Government to request a review of any aspect of the updated KSO.

Mr Parkes said the agreement did not require Telecom to carry free new types of internet call traffic that might emerge based on new internet capability.

"That's important given the explosive growth now occurring in dial up internet calls. These account for around 70 per cent of all residential local calls for which Telecom receives no additional revenue.

Telecom claims it is suffering the effects of the hard times in the internet industry and is owed $20 million by internet service providers.

- NZPA