The current TSO defines a basic residential telephone service (including dial-up Internet access) that Telecom must provide nationally. The TCF also believes that it is time for the TSO to be opened up to competition by allowing other companies to tender to be the TSO provider. There are a range of telecommunications companies, employing a range of technologies including wireless, who are now in a good position to provide TSO services to the more difficult to serve areas of New Zealand.
Other key recommendations contained in the TCF’s report include:
- continuing with free-local calling in TSO areas;
- moving to a funding model based on general taxation;
- moving away from Telecom-centric obligations to industry “codes of practice” for matters like call quality and emergency services call handling;
- maintaining a clear separation between the TSO and any initiatives to increase the uptake of broadband.
Questions you may have
What to Why is broadband not included in the recommendations?
What about emergency services?
What is happening to rural areas? Will they lose service?
Will rural dwellers lose the comfort of having Telecom as the supplier of last resort?
Is this just the industry trying to wriggle out of the costs of providing a "proper" phone service to all customers?
Are the alternative technology options such as wireless and satellite credible options for rural areas?
Why do you advocate a change to the funding model – isn’t this the industry just trying to weasel out of paying anything?
Why is broadband not included in the recommendations?
The TCF agrees that a basic residential access service should include internet access. In keeping with the technology neutral approach we consider that it is no longer appropriate to specify the service as “dial-up Internet”, allowing a range of other technology options to be employed.
The TCF recognises the importance of improving the availability and quality of broadband throughout New Zealand. However, in common with a number of other submitters to the MED’s original discussion document (including TUANZ and the Commerce Commission), we do not believe that the TSO is an appropriate mechanism to address any gap in the broadband needs of rural and remote customers – certainly not while the broadband market is still developing.
Furthermore, we believe that a well designed TSO will naturally result in a higher penetration of broadband into rural areas as it will often make sense for the two to be deployed together. Indeed, for some service providers broadband is already the means by which a voice service is delivered.
The TCF and its members will continue to work with government and other stakeholders to explore avenues for meeting the broadband needs of the industry’s rural customers.
What about emergency services?
Maintaining a reliable means of contacting emergency services is critical for all telecommunications users.
The TCF is working with government officials to develop an Emergency Services Code of Practice that is being designed to be applicable to all telecommunications service providers and all technologies.
Once this code is in place, there is no practical need for the current emergency services requirements to remain in the TSO, as they will be addressed elsewhere. However, we would expect that any future TSO provider would be required to comply with the Emergency Services Code as a condition of being the TSO provider.
What is happening to rural areas? Will they lose service?
The TCF’s recommendations are primarily directed at ensuring that rural and under-served areas continue to be provided with affordable basic telecommunications services, including reliable access to emergency services calling.
The description of the TSO service has been re-crafted in technology neutral terms in order to allow the TSO service provider (whether it be Telecom or anyone else) to adopt the most efficient and effective technology in the circumstances.
Under the TCF’s recommendations, rural and remote customers who are provided a service under the terms of the existing TSO will continue to receive a service. However, the technology and the service provider may possibly change.
Will rural dwellers lose the comfort of having Telecom as the supplier of last resort?
The days of having one telecommunications provider in New Zealand have long gone. Today we have a number of credible network operators and telcos operating in the New Zealand market. Opening the TSO to a competitive environment should deliver the kinds of efficiencies and cost reductions that the competitive marketplace has delivered in other areas.
Under the Contestable option we recommend, the winning tenderer would be the provider of last resort for the contract period and would be required to provide and maintain service. We expect that the tender requirements would ensure that the service provider was capable of delivering on their commitments for the contract period.
Is this just the industry trying to wriggle out of the costs of providing a "proper" phone service to all customers?
Not at all. The current TSO approach is not relevant in an age of rapidly changing technology and increasing competition – it needs to be brought up-to-date and be future-proofed. There is strong agreement within the industry and user groups that reform is essential.
In many areas of New Zealand, we believe that the level of competition (including from regulated access to Telecom’s network) is sufficient to roll-back many of the TSO obligations.
Customers who continue to need the protections afforded by the TSO will continue to receive them.
Are the alternative technology options such as wireless and satellite credible options for rural areas?
The TCF is confident that existing and emerging technologies, including wireless, mobile and satellite technologies, will be able to deliver TSO services to an acceptable standard. The revised TSO service is intended to permit alternative technologies where they are the most cost effective option.
Why do you advocate a change to the funding model – isn’t this the industry just trying to weasel out of paying anything?
Not at all. Ultimately the consumer pays for the TSO subsidy regardless of who appears to be writing the cheques.