What the Minister needs to do is to come out clearly and say, publicly and privately, that the TSO review will seek to modernise the protection of telecommunications services in rural areas.
Today I watched a video of Helen Clark’s presentation to last weekend’s Tedx Auckland show.  Whatever you think of her politics, Helen’s achievements and thinking are outstanding and I admire her for that.

In browsing related videos, I heard her comment on the GCSB ‘spying’ bill.  “It’s best that what you say in private is the same as what you say in public,” resonated with me as a self-evident principle.

But it is not a principle that we get from all politicians.  This is reflected in politicians being ranked 46th out of 50 in the Reader’s Digest’s list of most trusted professions.

So it was with concern, based on previous experiences, that I read Minister Amy Adams’ preamble to the “Review of the Telecommunications Service Obligations (TSO) for Local Residential Telephone Service”.  Whether my concern is well-founded or not, only time will tell.

kiwi-shareThe TSO is an important legal contract that binds Telecom (and now Chorus) to provide basic telecommunications services that are affordable and available equally to all New Zealanders.  Which is why it is sometimes called a universal service obligation.

The TSO requires that basic residential telephone prices not increase by more than the consumer price index and provides for free residential local calling.  The third main plank of the TSO is that rural residential telephone costs be no more than the standard cost that the rest of the country pays.

These provisions were written in to law when Telecom was sold to two US-based telecommunications companies in 1990.  Back then these provisions were a part of the ‘Kiwi Share’.  Other Kiwi Share requirements, like limitations on foreign ownership, have since been expunged.

The reasons that the telephone service obligations were written in to the Kiwi Share was to prevent the foreign owners of a monopoly from rorting a naive and powerless consumer.

We are not so naive today, but in the present telecommunications environment, some consumers remain powerless and need protection from rapacious telcos.  Witness Vodafone’s 25% increase in prices for rural broadband services last year.

Amy Adams has previously indicated to me that “Rural areas will not be disadvantaged in the government’s investment in faster broadband”.

But rural people have been and continue to be disadvantaged by her government’s policies.

If the intention of the TSO review is to remove the remaining Kiwi Share protections, particularly around rural/urban price equity, then rural people will be even more disadvantaged compared to their urban cousins.

In her public utterances, Amy Adams is telegraphing that intention.

She does this in her introduction to the Ministry of Business, Innovation and Employment’s TSO discussion document, where she posits, “… whether, given market developments, we continue to need the protections of the TSO”.

Further clues to this intention are contained in her other comments. When she says “It makes sense for regulation to better reflect this new technological landscape.”, she is ignoring the principle that the TSO protections are about affordability and availability and so are technology agnostic.

In her press release announcing the review, she said “Improved competition and well-targeted supply side initiatives … mean most consumers now have a wider choice of providers and services.”  Taken at face value, that statement is true enough but it resolutely ignores the broadband reality of the up to 25% of New Zealanders living in our rural areas.

What the Minister needs to do is to come out clearly and say, publicly and privately, that the TSO review will seek to modernise the protection of telecommunications services in rural areas.

[quote style=”1″]This article is the first of three that explores the implications for rural people in the review of the Telecommunication Service Obligation (TSO). This week, I am exposing what the government’s intentions appear to be. Next week I will look at the options being proposed for the review and in the third week will present what I believe should be done to best protect rural consumers’ interests.[/quote]