The Commerce Commission today announced that it will commence an investigation into whether the services Telecom Corporation of New Zealand provides to other telecommunications companies to be resold should be deregulated.

Retail services such as Homeline are offered by Telecom to wholesale customers to resell at a discount to the retail price.

"Regulatory intervention should be scaled back in areas where there is effective competition," said Telecommunications Commissioner Dr Ross Patterson. "Nor should regulation impose or maintain burdens which are unnecessary."

"The Commission is satisfied that there are reasonable grounds to commence an investigation," said Dr Patterson. "Telecom is providing these services on commercial terms without being obliged to do so by specific Commission decisions. There are also a significant number of Telecom's resale products that have had minimal or no uptake by other telecommunications companies."

The investigation will examine whether regulation should be removed, or amended to streamline the number of services covered.

The Commission will give public notice at the commencement of the investigation.

Background

The resale services offer other telecommunications providers the ability to purchase a service on a wholesale basis for the purpose of reselling that same service, either alone or in combination with other services or features to end-users in direct competition with Telecom, the access provider of the resale services.

Retail services are designated access services under subpart 1 of Part 2 of Schedule 1 of the Telecommunications Act 2001 (the Act). The retail services which are currently resold by Telecom are:

  • Retail services offered by means of Telecom's fixed telecommunications network (FTN);
  • Residential local access and calling services offered by means of Telecom's FTN;
  • Bundle of retail services offered by means of Telecom's FTN; and
  • Retail services offered by means of Telecom's FTN as part of bundle of retail services.

Schedule 3 of the Telecommunications Act. Under Schedule 3, the Commission can commence an investigation into whether or not the list of regulated telecommunications services contained in Schedule 1 of the Act should be amended by adding a new service, omitting a service, or amending the terms of an existing service, including whether a specified telecommunications service should become a designated telecommunications service (ie become a service where the terms and conditions including price can be set by the Commission). The Commission then makes a recommendation based on its investigation to the Minister for Communications and Information Technology.