Commerce Commission paper holds no surprises

By PETER GRIFFIN

The Commerce Commission has turned out another bulky paper that will hold no surprises for an industry waiting to see what the burden of the telecoms service obligations (TSO) will mean in dollars.

The commission is deciding how much it will cost the telecoms industry collectively to provide basic phone access and dial-up internet nationwide.

Telecom said last month that it loses $425 million a year meeting its Government-mandated obligations and wants other companies such as TelstraClear, WorldxChange and Vodafone to chip in.

The commission will split the cost of the TSO among a handful of companies based on market share, a process that will cost Telecom 80 per cent of the figure the commission decides on.

Debate has encompassed issues ranging from what constitutes an efficient telecoms carrier to what revenues should be taken into account when calculating the TSO and therefore what contribution each player in the market should make.

The commission reiterated its view that revenues Telecom receives from providing internet services to uneconomical customers should be included in the TSO calculation, as should mobile-to-fixed call revenue, additional revenue derived from providing second lines and Yellow Pages directories, when provided to uneconomical customers.

It also confirmed that it was excluding internet service providers from the equation, despite strong submissions from the industry that ISPs should be included because of the high volumes of traffic they put across Telecom's network.



Smaller companies such as Compass Communications and CallPlus will be asked to contribute, but only on their telecoms revenue, not revenue made from their internet operations.

A decision on the TSO cost will be made in December, but may not be finalised until well into next year, leaving carriers uncertain how much they may have to pay in backdated charges.

Telecommunications Regulation