Telecommunications Information Disclosure Discussion Paper Released Today

  • Maurice Williamson
Communications

The Government has taken a significant step forward in maintaining the momentum of competition in the telecommunications sector, Minister of Communications Maurice Williamson announced today.

Mr Williamson's comments follow the release today of the Telecommunications Information Disclosure Discussion Paper which proposes changes to the information disclosure regime.

"The telecommunications information disclosure regime was established in 1990 in order to facilitate effective competition in the telecommunications sector," the Minister said.

"The regime requires Telecom to disclose a range of information about its services and financial performance. This information is particularly useful to companies which need to interconnect to Telecom's network in order to provide telecommunications services.

"The regime was last reviewed in 1993 and resulted in a requirement for Telecom to disclose the full details of interconnection agreements," Mr Williamson said.

The discussion paper prepared by the Ministry of Commerce proposes the current regime can be usefully strengthened to provide enhanced information for facilitating competition.

In particular, the Ministry proposes that Telecom be required to prepare separate financial statements for its local loop and other, more contestable, businesses.

These statements would be prepared using the avoidable cost allocation methodology which requires the local loop element of Telecom's business to bear only those costs which it would bear if it did not operate its other, more contestable businesses.

"This disclosure will allow an enhanced assessment to be made of Telecom's charges for local loop services compared to its costs," the Minister said.

"In addition the Ministry proposes that Telecom be required to disclose all losses incurred in complying with its Kiwi Share obligations. These costs can form a component of interconnection pricing and disclosure will facilitate negotiation of interconnection agreements.

"A number of other amendments to the regime are proposed in the discussion paper, including increased disclosure of prescribed services, and disclosure of documentation associated with interconnection agreements.

"In combination, the proposed changes are designed to facilitate further competitive entry, which can be expected to lead to lower prices and more service innovation in the telecommunications sector.

"The proposals for upgraded information disclosure by Telecom do not represent a departure from the current light-handed approach to regulation, but seek to strengthen the current regime," the Minister said.

"The proposals involve some compliance costs for Telecom. However, the Ministry of Commerce has obtained professional advice indicating these costs are not likely to be unduly burdensome.

"In determining the nature of the final amendments to the information disclosure regime, the Government will consider closely any submission from Telecom on opportunities to reduce compliance costs.

"This may include aligning aspects of disclosure rules with reporting requirements imposed on Telecom by other jurisdictions, such as the US Federal Communications Commission," the Minister said.

The Government has asked for industry feedback by 23 December this year.

"While this is a tight timeframe for feedback the Government is keen to progress specific proposals for strengthening the information disclosure regime early next year," Mr Williamson said.

Copies of the Telecommunications Information Disclosure Discussion Paper are available from the Communications Policy Unit at the Ministry of Commerce (phone. 04 472 0030) or on the Ministry's website:

http://www.moc.govt.nz/ran/cnpg/telecom/teleinfodisc/