Comment sought on Telecom separation proposal
Public comment is invited on the structural separation proposal made by Telecom in response to the government's operational separation document, says Communications Minister David Cunliffe.
"I am very pleased at the number and quality of responses received on the consultation document released on April 5," Mr Cunliffe said. "Considerable thought and effort has been put into this important issue, and I thank all respondents for their contributions.
"Telecom, in its submission, has proposed the voluntary structural separation of its network business rather than the operational separation called for in the Telecommunications Amendment Act.
"As much of the Telecom submission is outside the scope of the act and the government's operational separation proposal, other stakeholders have sought an opportunity to comment on it.
"Given the importance of this issue, I am allowing two weeks for interested parties and the public to comment on Telecom's proposal."
In seeking comment on Telecom's submission, Mr Cunliffe says he rejects some of the claims made by Telecom.
"Telecom asserts that the government's operational separation proposal significantly departs from the successful British model. Neither the government, nor indeed many other submissions, share this view. The BT model is working well in practice and is widely seen as a leading policy benchmark.
"Telecom also asserts that separation will delay the introduction of local loop unbundling (LLU) and unbundled bitstream services (UBS). I do not accept that. LLU and UBS are top priorities and are on a separate fast track by the Commerce Commission, which has recently announced a revised, tighter timeframe for LLU. I am pleased that Telecom's submission now indicates its willingness to expedite this process.
"Operational separation is a measure passed by Parliament by an overwhelming majority in order to remove the ability and incentives for Telecom to discriminate against its wholesale customers. Operational separation therefore supports and improves the effectiveness of other measures in the wider reform package.
"Unless and until a voluntary structural separation model can be demonstrated to better achieve the outcome sought by the Telecommunications Amendment Act, operational separation remains the requirement of the act.
"Stakeholder comments on Telecom's outline proposal are accordingly sought, at this stage, to assist in informing this analysis," Mr Cunliffe said. "Vigorous lobbying is of course to be expected. However, the government's goal remains to ensure the best possible outcomes for telecommunications consumers and all New Zealanders."
Submissions on Telecom's proposal should be provided to the Ministry of Economic Development no later than 5.00pm on Tuesday 15 May, 2007. Further details and a copy of Telecom's proposal can be found at:
www.med.govt.nz/telecommunications/operational-separation.
What is the government now seeking comment on?
The government is seeking industry and public views on Telecom's proposal to establish a structurally separate network company, and their request to make other changes to the regulatory framework for telecommunications.
What are the government's views on Telecom's proposal?
The government has only just received the outline of Telecom's proposal, and will be considering whether it represents a way forward that meets the government's overall objectives. The government's full response to Telecom's proposal will be publicly announced in due course.
Will the government invest in, or buy, the separated network company?
The government's reforms are directed at creating an environment for the private sector to invest with confidence in new services and infrastructure, while generating the best long-term results for consumers. The government has no current plans to become directly involved as an investor in core infrastructure.
How does this development impact on the separation process?
Considering Telecom's proposal will require approximately four additional weeks of consultation and analysis that was not planned for, there is a consequent impact on the previously advised timeframes for operational separation, which will be subject to the outcome of that analysis.
Can Telecom structurally separate within the context defined in the operational separation consultation document?
The Telecommunications Act allows Telecom to offer a structurally separate solution, provided that it is consistent with existing obligations such as the TSO and complies with other separation requirements in the act, but does not permit the Minister of Communications to compel one. However, the model Telecom has proposed does not fit within the act in its current form.
"I am very pleased at the number and quality of responses received on the consultation document released on April 5," Mr Cunliffe said. "Considerable thought and effort has been put into this important issue, and I thank all respondents for their contributions.
"Telecom, in its submission, has proposed the voluntary structural separation of its network business rather than the operational separation called for in the Telecommunications Amendment Act.
"As much of the Telecom submission is outside the scope of the act and the government's operational separation proposal, other stakeholders have sought an opportunity to comment on it.
"Given the importance of this issue, I am allowing two weeks for interested parties and the public to comment on Telecom's proposal."
In seeking comment on Telecom's submission, Mr Cunliffe says he rejects some of the claims made by Telecom.
"Telecom asserts that the government's operational separation proposal significantly departs from the successful British model. Neither the government, nor indeed many other submissions, share this view. The BT model is working well in practice and is widely seen as a leading policy benchmark.
"Telecom also asserts that separation will delay the introduction of local loop unbundling (LLU) and unbundled bitstream services (UBS). I do not accept that. LLU and UBS are top priorities and are on a separate fast track by the Commerce Commission, which has recently announced a revised, tighter timeframe for LLU. I am pleased that Telecom's submission now indicates its willingness to expedite this process.
"Operational separation is a measure passed by Parliament by an overwhelming majority in order to remove the ability and incentives for Telecom to discriminate against its wholesale customers. Operational separation therefore supports and improves the effectiveness of other measures in the wider reform package.
"Unless and until a voluntary structural separation model can be demonstrated to better achieve the outcome sought by the Telecommunications Amendment Act, operational separation remains the requirement of the act.
"Stakeholder comments on Telecom's outline proposal are accordingly sought, at this stage, to assist in informing this analysis," Mr Cunliffe said. "Vigorous lobbying is of course to be expected. However, the government's goal remains to ensure the best possible outcomes for telecommunications consumers and all New Zealanders."
Submissions on Telecom's proposal should be provided to the Ministry of Economic Development no later than 5.00pm on Tuesday 15 May, 2007. Further details and a copy of Telecom's proposal can be found at:
www.med.govt.nz/telecommunications/operational-separation.
What is the government now seeking comment on?
The government is seeking industry and public views on Telecom's proposal to establish a structurally separate network company, and their request to make other changes to the regulatory framework for telecommunications.
What are the government's views on Telecom's proposal?
The government has only just received the outline of Telecom's proposal, and will be considering whether it represents a way forward that meets the government's overall objectives. The government's full response to Telecom's proposal will be publicly announced in due course.
Will the government invest in, or buy, the separated network company?
The government's reforms are directed at creating an environment for the private sector to invest with confidence in new services and infrastructure, while generating the best long-term results for consumers. The government has no current plans to become directly involved as an investor in core infrastructure.
How does this development impact on the separation process?
Considering Telecom's proposal will require approximately four additional weeks of consultation and analysis that was not planned for, there is a consequent impact on the previously advised timeframes for operational separation, which will be subject to the outcome of that analysis.
Can Telecom structurally separate within the context defined in the operational separation consultation document?
The Telecommunications Act allows Telecom to offer a structurally separate solution, provided that it is consistent with existing obligations such as the TSO and complies with other separation requirements in the act, but does not permit the Minister of Communications to compel one. However, the model Telecom has proposed does not fit within the act in its current form.