Minister should not accept draft Undertakings

InternetNZ recommends Minister not accept draft Undertakings

Media Release January 25, 2008

InternetNZ (the Internet Society of New Zealand Inc) has today responded to Telecom’s amended operational separation plan, advising the Government that significant amendments will still be needed to meet the requirements of the Telecommunications Act and ensure long term benefits to end users.

InternetNZ also seeks remedial action in respect to the Amended Determination that allowed group incentives for the Telecom Wholesale Manager, which has put operational separation at significant risk.

"There is plenty of groundwork laid, but the Amended Determination needs to be rethought and Telecom’s separation plan should not at this stage be accepted. The Minister should then proceed to the step of amending the Undertakings so that they meet the requirements and intent of the Act," says InternetNZ Executive Director Keith Davidson.

On November 23, 2007, InternetNZ filed a detailed submission identifying a number of serious deficiencies in Telecom’s proposed undertakings.

"Some areas have been addressed, but it may have been too much to ask Telecom to finalise these undertakings. The Minister, having reserved the ability to correct this, now needs to exercise that discretion," says Davidson.

"Also the Amendment to the Determination to allow significant group incentives in the remuneration of the Telecom Wholesale Manager, if not retracted or significantly tempered, creates a need for further measures to be included in the plan to counterbalance the obvious impact on the Wholesale division's independence.

"Further, to support the spirit of Operational Separation, Telecom business units should implement staff incentives that improve performance in those areas where historic behavior would not lead to the intended outcomes. For example reward staff of Telecom Wholesale for growing the share of the business coming from non-Telecom NZ customers."

InternetNZ's submission today revisits some of the major issues of its previous submission, and focuses in on key issues including the unmet requirement for disclosure of Telecom's fibre plans, inadequate chinese walls around planning of new services and policy making, and insufficient checks on the involvement of the CEO in the day to day business of the independent divisions.

InternetNZ's submission can be found here: http://www.internetnz.net.nz/issues/submissions/2008/

ENDS

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