KEY POINTS:
The Government is considering including broadband internet to rural areas in the agreement that keeps local phonecalls free and some other telecommunications costs down.
Communications Minister David Cunliffe today issued a discussion document on a review of the Telecommunications Service Obligation (TSO), originally known as the "kiwi share obligation".
Under the agreement Telecom must provide an affordable local calls service to residential customers who may not otherwise get one. Other telecommunications companies reimburse Telecom part of the costs.
Mr Cunliffe said the review would cover all aspects of the TSO, but fundamental facets such as access to emergency calling and a free local calling option would definitely remain.
However other areas could face a shakeup, he said.
"It will assess the merits of introducing a broadband TSO to address shortfalls in the availability of broadband services in rural areas."
The review would look at price changes and eligibility for TSO services.
It would also look at introducing contestability for determining which providers could access funding for a TSO subsidy.
Mr Cunliffe said the review of the TSO was the next step in the Government's overhaul of the telecommunications sector.
"An up-to-date effective TSO regulatory framework is a key element of the Government's telecommunications strategy and an important underpinning of rural and regional services."
The Commerce Commission released figures in July estimating the TSO cost $71.4 million in the 2004/05 financial year and $78.3m in 2005/06.
The Commission said Telecom carried 69 per cent of the TSO cost, with the remainder met primarily by Vodafone and TelstraClear along with a range of smaller providers.
- NZPA
