KEY POINTS:
Telecom's competitors may no longer have to pay the company for the provision of phone services if they can meet TSO requirements with wireless technology.
Telecom's competitors say technology changes since the TSO was introduced, including wireless and mobile communication, allow for alternatives to traditional fixed lines for the provision of basic voice services to hard-to-reach customers.
Telecom spokesman Mark Watts said the right to compete for non-urban customers could be an outcome of the TSO review.
"We'd be open minded about it," said Watts. "Certainly competition is fairly well developed in a lot of rural places with multiple providers and we'd accept that contention."
Watts said it would depend on what minimum standards and services were set as to what the contestability would be over and above that.
Telecommunications Users Association chief executive Ernie Newman said the fact that Telecom was prepared to accept the concept of contestability was a huge breakthrough.
"That opens the way for a really good commonsense solution because there is no 'one size fits all' in all of this," said Newman.
Vodafone spokesman Hayden Glass said the fixed-line-only solution meant Telecom's competitors were subsidising the fixed-line network, including areas where they had paid to build their own networks.
Draft determinations calculating the cost Telecom incurs meeting the TSO came to $71.4 million in 2005 and $78.3 million in 2006. About 69 per cent of the cost would be borne by Telecom. The remainder would be borne by other operators, primarily Vodafone and TelstraClear.
