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ISOCNZ Position



1. Introduction

ISOCNZ representatives met Telecom on Friday, 25 June to discuss the implications of the 0867 service and associated 2c/min charges. The meeting was productive, and covered much ground. This document represents the ISOCNZ's final position (as a result of this meeting, other research into the issue, and a poll of the membership) and largely deals with areas in which the Telecom and ISOCNZ positions differ.

ISOCNZ has analysed the responses given by Telecom, and finds several serious issues with the move to 0867. Consultation with our membership has drawn a divided response on the 0867 issue, however fifty-eight percent of voters on a recent ballot state that ISOCNZ should neither support nor oppose the overall 0867 scheme.

ISOCNZ will maintain a watching brief on the issue and will move swiftly if concerns expressed by members show signs of arising. However, assuming these issues are properly addressed, ISOCNZ does not believe that the move to 0867 represents an immediate danger to the fabric of the Internet in NZ. In fact, if managed properly, there are some potential long term benefits in the use of 0867 numbers, particularly in dial-up number portability.

2. Kiwi Share

ISOCNZ is deeply concerned at the position taken by Telecom regarding the status of data calls as being excluded from "ordinary residential telephone service" and therefore not subject to Kiwi Share obligations.

While Telecom has indicated it will not introduce call charges for Internet or other types of data calls to 0867 numbers, the acceptance of this interpretation by the Kiwi Shareholder would remove any guarantee that this would remain the case in the future.

ISOCNZ does not accept the explanation for this interpretation that data calls lie outside "ordinary residential telephone service" as interpreted in 1988, as long period residential data calls for teleworking and recreational purposes were common and growing at that time. The underlying nature of these calls has not been affected significantly by the move from the character cell terminal technology prevalent in 1988 to the use of Internet protocols and applications, and ISOCNZ believes that the rate of growth in these at that time should have given sufficient indication of the trends being experienced now.

ISOCNZ would have much less difficulty with the move to 0867 numbers if it were done within the context of the Kiwi Share, or if a suitably binding agreement were reached that Internet access via the PSTN by residential users would remain free so long as Telecom retains its near monopoly on residential telephone service provision. Sixty-three percent of our voters believe that any sort of charge is unacceptable.

We therefore strongly urge the Kiwi Shareholder to interpret "ordinary residential telephone service" as including data calls from residential lines and to make a public statement to this effect as soon as possible.

3. Definition of Internet Calls

ISOCNZ is also concerned that Telecom reserves the right to determine what constitutes a data service number. We believe this introduces an unacceptable level of uncertainty to services offering "internet-like" services to residential users. We therefore call on Telecom to provide a clear, description of what constitutes a data or Internet service number that will attract a 2c/min residential charge, and therefore should move to an 0867 number.

If this is not forthcoming, we call on the Kiwi Shareholder to rule on what does and does not constitute a call within the definition of "ordinary residential telephone service".

4. Motivations

We believe that the issue of interconnect payments, although discounted in Telecom's response, do represent a significant factor in this move. Even if this were not a factor in Telecom's motivation for this move, it must be recognised that there is an immediate financial effect on those Internet service providers that collect interconnect revenue from Telecom, be it directly or indirectly through another carrier.

ISOCNZ cannot predict whether the removal of these interconnection payments due to moving to an 0867 number will seriously affect the Internet services industry in NZ. Sixty-eight percent of the voters stated that ISOCNZ should not be involved in the issue of interconnect payments.

5. Migration process

ISOCNZ welcomes the flexibility shown by Telecom regarding the timeframe and compensation for the move to 0867 numbers, and encourages Telecom to follow through. However, we are concerned that "intangible" losses, such as competitive advantage lost to Telecom Xtra and other services unaffected by the move to 0867 due to resources directed to the migration, may not be adequately covered by such compensation. ISOCNZ urges Telecom to address any such losses within its compensation plan.

6. Service Level

Telecom's response indicates that it does not expect service levels on PSTN traffic to Internet service providers to drop significantly, with calls dropped only in the event of unusual overloading or emergency.

ISOCNZ believes Telecom should give a legally binding assurance to ISP's of their definitions of what constitutes an emergency, or a danger of overload, the anticipated frequency of such events, and financial penalties against Telecom should services be cut more frequently than anticipated.

ISOCNZ urges ISP's to require such an undertaking from Telecom during negotiations for the transition.

© 2000 The Internet Society of New Zealand
Last updated 12 July 2000

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