Telecom opens arms to probe

By RICHARD BRADDELL

WELLINGTON - Telecom has welcomed the Government's inquiry into the telecommunications industry as being forward-looking and well balanced in its terms of reference.

The Government yesterday announced that former Fletcher Challenge chief executive Hugh Fletcher would be joined by the deputy chairman of the Australian Competition and Consumer Commission, and competition lawyer Cathie Harrison in the three-person inquiry team.

Acting Communications Minister Trevor Mallard said the inquiry was set up because of concerns that the present environment made it difficult for new entrants to get a foothold and provide the competition necessary to bring down prices.

"It is my wish that the cost of phone bills, and in particular the internet, drops over a period of time," Mr Mallard said.

If Telecom is worried that it is the butt of the inquiry, it did not show it yesterday.

Its general manager of Government and industry relations, Bruce Parkes, said the inquiry panel was well balanced in its business and telecommunications acumen, and its terms of reference were positive, forward-looking and comprehensive.

Mr Mallard said it was hoped the regulation the inquiry might produce would put New Zealand at the forefront of the telecommunications and knowledge revolutions.

"I don't think you will get too many people disagreeing there's an issue here," he said.

"No doubt there are a lot of different views as to what is the solution."

The inquiry's brief is to examine interconnection issues, the Kiwi Share obligation -which guarantees free local calling - number portability and administration, management of internet traffic and the development of New Zealand as a knowledge economy.

Mr Mallard said his fellow ministers felt the Kiwi Share had been ineffectual in influencing Telecom's behaviour.

The inquiry will hold preliminary consultations, then issue a draft discussion report. It will hear submissions on this, and make its final report by September 29.

Mr Mallard said he hoped that if legislation was necessary, it would go to Parliament before the end of the year.

The inquiry has a budget of $802,000. Mr Fletcher will be paid $1200 a day and the other members $900 a day.