Curb on landline-to-cellphone fees expected

Communications Minister David Cunliffe looks set to rubberstamp a Commerce Commission recommendation on regulating landline-to-cellphone call rates.

The minister outlined his decision process on the recommendations yesterday, and is giving interested parties until June 23 - one week - to submit their comments.

Cunliffe decided against a longer, full submission period because the commission had already consulted widely during its investigation.

"I do not intend to replicate the consultation process undertaken by the commission in its investigation," he said.

"However, if new matters have arisen that the commission has not had an opportunity to consider, then interested parties should have an opportunity to provide comment."

The commission last week found that so-called cellphone termination rates - or what landline providers charge customers for calling mobiles - were too high, and the Government should regulate them.

The providers were claiming a cost of 27c a minute, but after a comparison with other OECD countries, the commission found the rates should be about 15c, or at least 12c lower.

The commission's report also slammed the New Zealand industry for having the highest overall cellphone calling rates in the OECD.

Cunliffe said he would make a decision after considering the submissions and advice from officials.

In general, call prices have dropped in OECD countries that have regulated mobile termination rates. But some observers are concerned that New Zealand could follow the Australian example, where regulated cuts benefited landline providers, who absorbed the lower rates without passing them on to customers.