KEY POINTS:
Communications Minister David Cunliffe is set to detail amended Telecommunications Service Obligations within the next two weeks.
A spokesman for the minister said details of the new system for the TSO - setting the cost of reaching uneconomic rural customers - were being hammered out with the telco industry and were confidential.
But the amended TSO scheme is expected to incorporate the new contestable broadband fund announced in Thursday's Budget, whose target includes the rural sector.
The Government has allocated $340 million over five years to expand broadband capabilities.
Ironically - while National has traditionally been seen as having a rural constituency - its approach is more focused on urban users.
National's policy for a $1.5 billion state investment in a fibre-optic rollout would - if it were enacted - have little immediate impact on rural customers.
As for the TSO, all telcos will be relieved that the old system is coming to an end, including Telecom, which used it to prop up its profits.
But while the TSO has been given a welcome shake-up the old scheme with calculations of how much it costs to reach customers will continue to be calculated for the next three years.
The Commerce Commission yesterday released a revised draft reducing the cost of $78.2 million to $64.6 million. The previous year had also been reduced.
Telecom has around 69 per cent of the responsibility with the remainder covered mostly by Vodafone and Telstra Clear.
But although the other telcos are required to deliver Telecom a cheque for their share, Telecom has been under no obligation to actually spend the money.
