The Government has offered Australia's three mobile operators, and vividwireless, renewal of their existing spectrum allocated on 15 year licences in the late 90s and early 2000s at set prices, while the Government expects to rake in $3 billion.
The initial plan had already been amended to meet the minister's demands, made following concerns expressed by the industry. Announcing his decision he said that public submissions on the amended plan had been "instrumental in identifying the need for greater clarity to ensure that Telecom's operational separation will be effective and enduring...In particular, I have asked Telecom to provide a clear upper limit on group-based incentives. This is to ensure that Wholesale management is encouraged by those incentives to treat all its customers (including Retail) equally. I want this to be consistent with robust operational separation. Other key changes requested include greater clarity around IP interconnection, as well as a range of other technical and definitional matters."
Telecom has until 25 March 2008 to revise its separation plan. The minister must then either accept or reject the revised plan. If it is accepted, on 31 March 2008 "Separation Day" Telecom must have established a stand-alone access network services unit and realigned wholesale services and a legally enforceable Independent Oversight Group.
TUANZ chief executive, Ernie Newman, said: "The changes requested are not huge in scope, but they are critically important. Other phone companies who invest large sums to compete with Telecom need to know with certainty that the confidential information they supply is properly protected, key Telecom managers' incentives are appropriate to their roles, and the legal framework is as robust as it can possibly be.
"We share the minister's confidence that this will be resolved quickly and we too confirm our appreciation of the positive manner in which Telecom has responded to the separation process. Separation Day on 31 March will be a huge watershed for New Zealand businesses and citizens, with more choice and better value in the market."
Newman's comments were echoed by Internet Society of New Zealand executive director Keith Davidson. "We are on the cusp of a significant milestone in telecommunications in New Zealand," he said. "A lot is now riding on the spirit in which Telecom embraces operational separation, on Telecom ensuring equivalent access for access seekers at both network and wholesale level and incenting the staff of its divisions towards that end."
He said that InternetNZ had raised a number of issues in its submission including lack of industry consultation on the next generation network, interconnection and disclosure of Telecom's fibre plans. "Telecom is in trials of fibre services and is involved in fibre to new subdivisions. Its plans and commercial policies around future access services should be disclosed."
David Bass
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