Structural Separation must be controlled by government

Structural Separation must be controlled by government, and equivalence protected

Media Release – 16 March 2011

InternetNZ (Internet New Zealand Inc) today releases the supplementary submission it made to Parliament on the Supplementary Order Paper which seeks to amend the Telecommunications (TSO, Broadband and Other Matters) Amendment Bill.

The submission features strong calls for:

* the Government to actively direct any structural separation of Telecom in the public interest,

* the retention of Equivalence of Inputs requirements on Telecom’s copper network,

* the absolute importance of strong consultation requirements to make sure the detail is right.

“This SOP was only released on 16 February, and contains proposals that had never been canvassed publicly before,” says InternetNZ Chief Executive Vikram Kumar.

“It has been very difficult to analyse the material in such a short timeframe.

“We have done our best, and we are very troubled by the proposals the SOP contains, which would fundamentally unwind many of the competitive gains of the past ten years in telecommunications markets.

“If structural separation is to work in the public interest, the Government has to be able to shape the separation. The SOP gives all that power to Telecom. That needs to change.

“Amendments should put the Commerce Commission or the Minister in the driving seat.

“The big gains in copper competition in the past few years have relied on Equivalence of Inputs and the operational separation of Telecom. These steps have created a level playing field for other investors, and seen better services at lower prices. The SOP seeks to cut them back, and that is a major misstep.

“Amendments should restore Equivalence of Inputs to a central role. The separation undertakings should ensure this is imposed for copper, as it is today – and as will be required for fibre anyway from 2020.

“Whether it is deciding how Telecom splits, agreeing service sharing between the separated parts of Telecom, or defining the non-discrimination undertakings, no public consultation is required of Ministers. This needs to change.

“Structural separation is at least as complicated as operational separation. The consultation undertaken in 2007 on operational separation prevented major errors and helped guarantee competition could thrive.

“Amendments need to require effective, thorough public consultation to get the detail right.

“Our submission covers these issues in depth along with others. We commend it to members of the Finance and Expenditure Committee.

“I will be appearing before the Committee tomorrow with the InternetNZ team to present our oral submissions. We will be reiterating these points, along with those made in our earlier submission on the Bill.

“New Zealand stands at a crossroads.

“We can now choose to take the time to make sure we get the future of our telecommunications industry right.

“Or, we can choose to risk undoing the gains of recent years and rushing into a poorly thought out alternative that doesn’t deliver for anyone.

“I call on the Committee to take the first option.

“I hope they take our suggestions on board, because they are designed to secure the overall objectives the Government has adopted: to build a telecommunications industry that serves the interests of Kiwi consumers and businesses in the long run,” Vikram Kumar says.

The supplementary submission is online at http://tinyurl.com/5teg9zh or can be found on InternetNZ’s website at www.internetnz.net.nz

ENDS

About InternetNZ:
Internet New Zealand Inc is a non-profit organisation dedicated to protecting and promoting the Internet in New Zealand and fostering a coordinated, cooperative approach to its ongoing development.

Our primary objective is “high performance and unfettered access for all” so the Internet continues to operate in an open environment that cannot be captured by any entity or individual for their own ends.

Through consultation with our membership of Internet service providers (ISPs), academics, public information groups and Internet users, we provide comment and advice to politicians, industry influencers and the media. More at: www.internetnz.net.nz/about-us

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