Telecom's free local calls safe, Govt says

Steven Joyce. Photo / Martin Sykes

The Government has quashed speculation it is about to free up Telecom's foreign ownership rules and do away with free local calls.

Labour communications spokeswoman Clare Curran accused National of "creeping dilution of our regulatory framework" under a review of the telecommunications sector outlined in a Cabinet paper.

The document tabled by Infrastructure Minister Bill English details an audit of the Telecommunications Act to be undertaken by the Ministry of Economic Development and Treasury.

Up for discussion is the telecommunications service obligations (TSO) which ensure phone services for uneconomic customers and free local calls; Telecom's Kiwi Share requirements capping foreign ownership and governance; Resource Management Act changes regarding network building; and the role of the Commerce Commission alongside policy development.

Curran said the review opened the way for full foreign ownership of Telecom and the prospect of paying for local landline calls.

Communications and Information Technology Minister Steven Joyce said while there would be a review of the telecommunications regulations there was no plan to axe free local calls or change Telecom's foreign ownership rules.

"Free local calling is not something that's an issue. You need a telecommunications provider of last resort which is one that covers the whole country and there's been no great interest in changing the shareholder rules. It's not like we're being pushed to do so."

He said the likely focus would be whether the TSO needed updating to reflect changes in technology.

Telecommunications Users Association head Ernie Newman supported a review.

He said it was scandalous neither Labour nor National governments had overhauled the TSO levy system.

"This is a 1989 instrument which has been wildly inappropriate for the time and it should have been looked at long ago," he said.

Newman said the highly emotive "free" local calling should also be challenged.

"What people don't realise is there is no such thing as free local calling. You're still paying for it but what you do is pay a hell of a lot more than the normal monthly rental for a phone line as an alternative to paying for each call or each minute," said Newman.

Newman also said he could see no reason why Telecom's offshore ownership issue "shouldn't be dusted off and had a look at".

Joyce said further announcements on the Government's high-speed fibre network and plans to spend $48 million on rural broadband would be made in a few weeks.