Telecommunications Commissioner Douglas Webb has asked telcos to rein in a paper blitz at the conference on the determination of TSO obligations and similar future events, or to consent to conference times being considerably extended.
The process of responding to the commissioner’s reports was initially intended to be a straightforward matter of written submissions from the various parties and brief oral cross-comments on the conference floor. Full written cross-submissions were not envisaged, Webb says, but now such supplementary paperwork was becoming the rule.
What led him to call the parties to order last week was a paper from TelstraClear in rebuttal to Vodafone arguments; entitled “oral submission”, it runs to 33 pages with more than 20 tables, graphs and diagrams. Vodafone protested that it not been forewarned of the paper’s complexity, and its economics expert had had no time to do more than flick through it before the parties were scheduled to make their closing statements.
Webb read the paper overnight, said it was effectively a full cross-submission and gave Vodafone a week to read and prepare arguments against it.
The topic of the paper is whether net or gross revenue should be taken into account in calculating TSO liability. TelstraClear supports the Commerce Commission’s net revenue approach, while Vodafone said more care should be taken over comparing the two. It argues that the net revenue approach favours resellers rather than those providers who invest in their own infrastructure.
This was the general tenor of debate last week with each party trying to minimise its own share of the TSO budget, under a scheme which will see the other telcos paying Telecom to mitigate what Telecom claims are huge costs of subsidising uneconomic consumers.
Vodafone stands to pay the most out of Telecom’s competitors, being assessed in this year’s draft determination for a 20.66% share of total TSO payments, or almost $13 million. Telecom’s share is assessed at $73.5%, or $46 million.
Counties Power argued that neither of its services, GoLive or Wired Country, operates a “public switched telephone network” and neither do its services interconnect with Telecom’s PSTN; so it should not be liable for TSO payments.
BCL put up a similar argument, pointing out that “we do not originate, terminate or switch any traffic”; that is all done by retail service providers using its wholesale network.
Much discussion revolved around the meaning of the clause defining a liable operator as one who “provides a telecommunications service in New Zealand to end users by means of some component of a PSTN that is operated by the person.” Neither BCL nor Countries Power operates a PSTN, they say, but TelstraClear, seeking to decrease its own contribution, argues that merely operating a component of a PSTN should make one liable.
Everyone but the three largest players seemed able to argue themselves out of at least one letter of the abbreviation “PSTN” or responsibility for serving “end users”. Under some definitions of a “public” network, a PABX in a hotel might qualify, one suggested. There was some discussion of the meaning of the term “end user” and whether an always-on connection whose users keyed in a sequence of characters to access the desired party (arguably including a PC with web browser) could be called a “dial-up” link.
The “wireless cap”, a charging formula for discouraging inefficient use of landlines in terrain better suited to wireless, came in for criticism as a “blunt” and insensitive tool, but one that, according to Telecom consultant Network Strategies, could make an eight-figure difference to the TSO impost.
There was also (as in previous TSO conferences) considerable discussion of the costs of excavating trenches. The parlous state of the terrain around Blairlogie in the Wairarapa was held out as an example. Different models used for this evaluation will markedly affect the TSO evaluation.
The Commissioner will now consider the comments, including Vodafone’s permitted right of reply to the TelstraClear “oral submission” and will deliver his final conclusions “soon”.