Swain has a big call to make to Telecom

By Richard Braddell

Between the lines


The new Commerce and Communications Minister, Paul Swain, has set himself a tough task.

Before six months in office are up, he will have completed a wide-ranging inquiry into telecommunications and laid the ground for changes that will become law before the new year is out.

Even before then, he will have fast-tracked an inquiry into the unilateral imposition of 0867 internet access by Telecom. This inquiry is vitally important since it will establish whether the claims of monopoly control and abuse being levelled against Telecom are well-founded; and if so, what is needed to ensure that the fastest-growing area of telecommunications can deliver its maximum potential to the economy.

Or will it? There are many traps ahead, not least balancing the claims and counter-claims of those in the industry. Take, for instance, the nice distinction that seems to have been drawn between the 0867 internet traffic agreement reached between Telecom and Saturn. Some would argue that it was outrageous Telecom got away with placing 0867 traffic outside existing interconnection agreements. But it did, because the carriers most affected, Clear and Saturn, had little stomach for pursuing what at best would have been a pyrrhic victory in court.

But while the new 0867 agreement signed between Telecom and Saturn looks, smells and barks like an interconnection agreement, Telecom has no plans to disclose it under new rules that come into effect on January 1. The reason: because it is an internet traffic agreement.

True, the Commerce Commission is looking into 0867 and that should be of some help. But the commission's inquiry is taking much longer than expected and may not be completed until February. To suggest that its appetite for a more rigorous investigation is due to the installation of a more reform-minded Government may be uncharitable, even if there are grounds for that suspicion.

Meanwhile, Mr Swain has his work cut out for him. His inquiry is into, well, just about everything - interconnection agreements that seem one-sided, number portability, local loop pricing, maybe even the potential for forcing Telecom to unbundle its local loop.

The issues are important. Of 0867, he said in August: "Telecom has cleverly distinguished between voice and data traffic and wants to charge for the latter. This, in Labour's view, is not so much about capacity, but more about Telecom bypassing its obligation under the Kiwi Share (for free local calling) when voice and data become indistinguishable."

That thesis alone is certainly worth investigating. The question is whether laissez-faire inclined officials in Commerce and Treasury will give him the support he needs. And whether, as minister, he will have time to push home goals developed in the leisure of opposition.