InternetNZ releases separation submissions

InternetNZ releases operational separation submissions

Media Release April 30, 2007

InternetNZ (The Internet Society of New Zealand) today released its submission made to the Ministry of Economic Development's "Development of Requirements for the Operational Separation of Telecom" consultation.

"InternetNZ supports the operational separation process, and the path set out in the Ministry's document is by and large a good one in our view," said Deputy Executive Director Jordan Carter.

"There are however improvements that should be considered. The Ministry's approach to the operational separation provisions in the Telecommunications Act has been very narrow. This narrowness extends to the services included in the separation requirements, how new services might be subjected to equivalence requirements, and in providing a robust process around development of Telecom's NGN.

"InternetNZ's submission proposes changes to address this narrow focus that are more in keeping with the model adopted in the UK, particularly around the need for transparency and industry consultation in NGN developments. The operational separation process would be a lost opportunity if progress is not made in this area.

"The Ministry's focus on Equivalence of Inputs rather than the less effective 'equivalence of outcomes' approach is encouraging. The proposed division of assets, including fibre and some transport electronics in the new Access division, is the right approach.

"InternetNZ has welcomed Telecom's proposed alternative approach, consisting in our view of weaker and more tightly targeted equivalence requirements and less restrictive governance requirements and regulatory relaxation, traded off against a guaranteed product rollout path, investment pledges and a structural separation of the access division.

"InternetNZ believes the Telecom proposal is somewhat light on detail but we believe a solution between Telecom and the Government that respects the need for a strong and robust separation and delivery of equivalence is the best possible outcome for the telecommunications market.

"As noted in the submission, InternetNZ supports a robust process to develop the best possible separation plan, even if this requires more time than the Ministry had anticipated. The Society will be reviewing Telecom's plan in greater depth in the coming days and hopes to be able to make comment on it to Government and other stakeholders reasonably soon.

"Whichever path is eventually chosen, Telecom and the industry have a responsibility to make it work. In particular the timing of separation processes has to be realistic, to avoid as much as possible disruption of service rollout (particularly of those services currently being considered in the standard terms determination process - LLU and UBA).

"InternetNZ finally notes that the entire change to the regulatory framework has kept investment incentives in mind. The operational separation plan outlined by the Ministry does not, in our judgement, preclude reasonable and effective investment by Telecom and potentially other players in the access network.

"InternetNZ believes it is inappropriate for involved parties to be making comments that may be interpreted as unilateral threats to infrastructural investment should they not get their way.

"Overall, InternetNZ welcomes the operational separation document and Telecom's proposed alternative. Separation is the only way to promote a more competitive market in telecommunications in the long run. It has to be done once and done right," Jordan Carter concluded.

ENDS

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