Big players applaud telecommunications policy

By RICHARD BRADDELL

The leading protagonists, politicians and the telecommunications user group, Tuanz, are applauding the Government's telecommunications policy.

Unveiled at the Beehive by Communications Minister Paul Swain and Associate Commerce Minister Laila Harre, it aims to bring more competition, efficiency and lower prices - as well as ending 10 years of strife - to the industry.

Mr Swain and Ms Harre said it was evidence of the Coalition working well together.

And National's communications spokesman, Lockwood Smith, said it overturned significant parts of the Hugh Fletcher-led telecommunications inquiry that were unsatisfactory.

But he questioned the need for a costly inquiry given that many recommendations were ignored.

The policy treads the middle ground between interventionism and the status quo preferred by Telecom.

Telecom's chief executive, Theresa Gattung, said its pragmatic, measured approach gave certainty to the industry and the markets.

While the policy backs away from immediate adoption of many of the inquiry's recommendations, it leaves the way open to adopt them later if progress on industry issues is unsatisfactory.

Under part of the policy, Telecom will spend $100 million to make all its network capable of basic internet access.

And in an important clarification, the Kiwi Share's definition of free local calling will explicitly include data and internet, removing the uncertainty in the 0867 internet access row that blew up last year.

The policy would have no bottomline impact on Telecom's business, Ms Gattung said.

She supported the decision to put the specialist telecommunications regulator, who will oversee the industry, within the Commerce Commission, rather than have an independent commissioner.

But that decision did give rise to a fear of regulatory creep, Ms Gattung said.

The Telecommunications Users' Association described the policy as a great leap forward, but would have preferred an independent commissioner.

Clear Communications, whose celebrated interconnection disputes with Telecom were a prominent catalyst for the inquiry, said the new framework would promote competition by providing a roadmap for settling disputes, rather than letting them drag on in court for years.

And while the Government has not accommodated Clear on local loop unbundling, the company said it was still a victory that the door was open for its introduction later.

But the inquiry's failure to regulate access to Telecom's retail phone lines was a significant disappointment to Telstra Saturn's corporate development manager, Deanne Weir.

"By international standards, this is so incredibly benign," Ms Weir said.

The Government was missing a huge opportunity to promote competition in the retail sector, she said.

Telstra Saturn recently signed an understanding with TVNZ under which the two would distribute and market television services.

But Telstra Saturn's current wholesaling agreement with Telecom is at business rates, which does not sit well with free residential calls.

Ms Weir said it would be difficult to bundle pay television, internet, tolls and other services on the present agreement.