Telecom New Zealand to do the splits

Stuart Corner
Wednesday, 26 September 2007 17:26

IT Policy - Regulation

The New Zealand Government has detailed its plans for the operational separation of Telecom New Zealand saying the move will underpin increased competition and efficient investment for the long-term benefit of all New Zealanders."

Communications minister, David Cunliffe, said: "Today's determination reflects the model of separation set out in the April discussion document, which was informed by the reform of British Telecom in the United Kingdom. Some amendments have been made to improve the efficacy of separation and to provide positive incentives to upgrade the network, with appropriate safeguards."

Telecom will be required to separate three key business units, establish an Independent Oversight Group (IOG), and implement the principle of equivalence of supply of relevant telecommunications services. The IOG will comprise three independent members, one of whom will be chair, and two Telecom members. It will have the power to report directly to New Zealand's' trade watchdog, the Commerce Commission, where appropriate.

In addition to the requirements of the Telecommunications Act, the Minister's Determination imposes:

• A requirement to establish a separately branded, stand-alone access network services unit that will control all present and future access network assets, and the services provided using them, including fibre and wireless access assets.

• A requirement that any future commercial fibre-to-the-premises and access to the NGN core be provided on a non-discriminatory basis.

• A requirement for an arms-length wholesale division that will provide access to key fixed network regulated services, including advanced Bitstream services to all service providers (including Telecom).

• A requirement that the key regulated services be supplied to the equivalence of inputs (EOI) standard, and that new network services (including fibre and access to the NGN core) be developed to be "EOI ready" to underpin future non discriminatory access.