The Commerce Commission has announced its indicative process for determining mobile termination rates, following today's announcement by the Minister for Communications and Information Technology, Stephen Joyce, that he has accepted the Commission's recommendation to amend the Telecommunications Act 2001 to allow the regulation of mobile termination access services.

 The Minister's decision is expected to take effect in mid-to late September 2010.

 "As soon as the changes to the Act giving effect to the Minister's decision come into force, the Commission expects to commence a standard terms development process for MTAS. Details on the timeframes will be provided at that time. The telecommunications industry has emphasised the importance of providing certainty over mobile termination rates, and completing the standard terms development process promptly will provide this certainty. The Commission is confident that the issues that will need to be considered are clear and can be addressed in a timely manner," said Dr Ross Patterson, Telecommunications Commissioner.

 If the Commission does commence the standard terms development process under the Telecommunications Act, it must conduct a scoping workshop to which all interested parties will be invited. After the workshop, the Commission would then issue a notice to the access provider(s) to submit a standard terms proposal for the supply of mobile termination access services. Following consultation on the proposal, the Commission would then determine the price and non-price terms for the supply of the services.

The Commission will be making no further comment prior to making a decision on whether to initiate the standard terms process.

Background

 On 16 June 2010, the Commission recommended in its reconsideration report that the Minister allow for the regulation of mobile termination access services (including the price for those services) by adding the services to Schedule 1 of the Act, and to reject undertakings offered by Telecom and Vodafone in lieu of the proposed regulatory change.

Under the Telecommunications Act 2001, the Commission can only commence a standard terms development process for services that are specified in Schedule 1 of the Act.   The Minister has announced that mobile termination access services are expected to be added to Schedule 1 of the Act by mid-August 2010, although the change will not come into force until mid-September 2010.

Subpart 2A of the Act specifies the process by which the Commission is required to follow in making a standard terms determination, which sets the terms on which a designated access or specified service must be supplied with reference to all access seekers and access providers of the service.  

This process requires that the Commission must:

  • give public notice of the standard terms process (section 30D);
  • conduct one or more scoping workshops, to determine the period of time within which an access provider must submit a standard terms proposal and to identify any additional requirements for that proposal (section 30E);
  • after the scoping workshop, give written notice to 1 or more access providers of the service requiring them to submit to the Commission, by the date specified in the notice, a standard terms proposal (section 30F);
  • upon receipt of a standard terms proposal, give public notice of the proposal and specify a date for submissions on the proposal (section 30I);
  • prepare a draft standard terms determination, including both price and non-price terms (section 30K);
  • request submissions on the draft determination (section 30K). In practice, the Commission generally provides an opportunity for cross-submissions;
  • consult interested parties or hold a conference (section 30L). The Commission usually holds conferences during the development of standard terms determinations; and
  • prepare a final standard terms determination that specifies sufficient terms to allow, without the need for the access seeker to enter into an agreement with the access provider, the designated access service or specified service to be made available within specified timeframe (sections 30O and 30P).