KEY POINTS:
Telecommunications Minister David Cunliffe today announced a review of Telecom's "Kiwi Share" obligations relating to the provision of rural internet services.
The Kiwi Share, today known as the Telecommunications Service Obligations (TSO), was set up when Telecom was privatised in 1990 and guaranteed free local calling to all regions.
Mr Cunliffe said the TSO was being reviewed to ensure it took account of fast-changing technologies. It would scope whether the TSO should cover rural broadband internet access.
Mr Cunliffe signalled the rules would be tightened rather than relaxed, saying New Zealanders should all have access to affordable basic telephone services.
"We have no intention of moving away from the basic principle in the Kiwi Share of preserving free local calling for residential telephone users."
In May, the Government sent Telecom's share price spiralling down, losing one third of its value, when it announced it would force the company to open its network to internet rivals.
The shares have since recovered over half of their value and yesterday hit an eight month high of over $5 as investors bet Telecom will get a high price from the sale of its directories division.
Mr Cunliffe said the review would consider a number of issues concerning the effectiveness of the TSO in providing local service, including the regulations and rules controlling how TSO instruments were administered.
A discussion document will be published in the first half of this year, inviting submissions from the industry, user groups and other interested parties.
Mr Cunliffe said the review, to be co-ordinated by the Ministry of Economic Development, would be conducted in parallel with the Government's Rural Broadband Strategy aimed at ensuring acceptable rural phone and internet services.
Telecom shares were down 4c to $4.98 today.
- NZPA
