Warning on: 'regulatory creep' in telecom bill

Friday 3rd August 2001

By Rob Hosking

Politicians have been warned of the dangers of "regulatory creep" in the government's Telecommunications Bill. The warnings come from not only all the main telecommunications carriers but also the New Zealand Law Society.

The society has criticised, among other things, the apparently unfettered power of the Minister for Communications to impose a levy on providers to pay for industry regulation.

Under clause 11, the minister may make a levy by order-in-council, and this power is unconstrained by any outside factors.

"There are no criteria for the making of a recommendation, nor any limits," the society's submission to the commerce select committee says. "There is no requirement that the minister consult with those who will be subject to the levy."

The society wants a requirement that the minister consult with the telecommunications carriers affected by any such levy, and also that clear criteria for the levy be written into the bill.

"Without such amendments there is no transparency or accountability."

Also under fire for a lack of transparency or accountability is the government's proposed amendments to the old Kiwi Share provision, agreed between Telecom's new owners and the government when the company was privatised in 1990.

The change from Kiwi Share to the "telecommunications service obligation" (TSO) imposes further requirements on the main telecommunications provider - which will still, in the foreseeable future, be Telecom - but the bill allows for the government and Telecom to reach an agreement on the scope of the TSO in private.

The TSO includes the levy that is imposed on the non-Telecom players to compensate Telecom for its provision of universal telephone access.

Telecom's estimates of how much this service costs it have earned scorn from the rest of the industry, and there is a fear that if it set a levy with the government, without a transparent process, the rest of the industry will suffer.

Clear Communications has lambasted the provision as allowing a private deal between the government of the day and the main telecommunications provider - Telecom.

"It is inappropriate for the government and the telecommunications service provider to be able to agree on the scope a TSO, and the total amount which is payable by liable persons to the provider, with no transparency, consultation or cost review mechanism."

Comments from our readers

No comments yet