Step two: making the deed work

By Richard Braddell

Between the lines

As expected, the telephone numbering deed got the tick from the Commerce Commission. But while the odds the commission would not approve it were slim, the deed's ability to solve the numbering issues bedevilling telecommunications is in question.

The first test may come from Clear Communications, which has yet to declare its hand on whether it will go to court to overturn it on the constitutional grounds already raised by Clear's legal adviser, Sir Geoffrey Palmer.

But even if Clear falls into line, there are still many questions. Key among them: why should number administration and number portability be inextricably linked? The best answer seems to be that without joining them, telcos could take numbers but freeload on the cost of developing a number portability solution.

If that is so, then the commission's reasoning on how the deed will operate is puzzling. Consider its solution for carriers who find portability development costs too high. "They will be able to sign the deed, obtain access to numbers, and then withdraw from the deed before they would be eligible to meet the cost of any new portability arrangements."

But the reason why carriers like Clear want no truck with the deed is that they see it as delaying, not fostering, the introduction of portability.

In the first instance, the deed provides only for a cost benefit analysis as to whether portability is a good idea. Even if analysis finds it is, disputes, arbitration and review processes could drag on for five years, Clear reckons.

Putting aside the deed's provisions, there is a real question mark over whether Telecom's switches have the capacity to provide portability.

In contrast to its competitors, Telecom's exchange equipment dates back to the mid-1980s. At one point, Telecom suggested (in what it now says was a hypothetical number to illustrate a point) that its cost for portability could be $100 million, an observation that helped confirm suspicions among its competitors that it wanted them to meet at least part of the cost of upgrading its network.

That almost certainly would involve new switches which in themselves would take time to implement.

Meanwhile, Saturn Communications, whose rapidly expanding customer base would grow even faster with number portability, didn't even bother to turn up the commission's conference on the matter last month.

Beyond doubt, Saturn's faith in the commission was badly shaken when it sanctioned Telecom's street-by-street price matching when Saturn began activating its Wellington network. It now hopes for reform of the Commerce Act for salvation.

But with 24 per cent of the market without even trying, it may be thinking that by the time portability gets here, it might benefit Telecom as much as itself.