ISOCNZ Questions to Telecom June 99

Discussion between Telecom and ISOCNZ regarding Internet call charges and the 0867 number range.

Introduction

This is intended to be the core of discussion between Telecom and ISOCNZ regarding the 0867 migration, and focuses on issues raised by members. ISOCNZ would prefer to discuss these issues with Telecom, and work through areas of mutual interest rather than take an adversarial position, however it should be noted that many ISOCNZ members have severe problems with the Telecom move and ISOCNZ would be remiss in not attempting to address these.

1. Kiwi Share

It is widely believed in the industry that the 0867 moves threaten the status of the "Kiwi Share". The relevant part of the Kiwi Share reads:

5.2.1 Local Call Charging - A local free-calling option will be maintained for all residential customers. Telecom may, however, develop optional tariff packages which entail local call charges for those who elect to take them, as an alternative;

The term "local free calling option" is defined in clause 5.3 to mean the standard local telephone service provided to residential customers at the time the Kiwi Share was put into place.This service definition does not define any type of call within the free calling area that is chargeable.

In addition, it is widely believed that a residential call to a number that does not require an area code to be dialled is a local call, and under the free calling option, would not be charged.

(a) ISOCNZ wishes to know how Telecom justifies the move to charging for local call ISP numbers in the context of the Kiwi Share, specifically, is it Telecom's position that (1) The Kiwi Share does not apply to non voice or Internet calls, or (2) The Kiwi Share does apply to non voice calls and the new arrangements comply with the kiwi share as 0867 calls are still free?

(b) If (1) is true, what guarantee is there that 0867 calls will remain free to residential users in the future?

2. Reasons for Change

ISOCNZ has some difficulty with the explanation provided by Telecom to ISPs and to the media regarding the load placed on the residential PSTN infrastructure by Internet calls.It is felt by many in the industry that the responsibility for providing sufficient local capacity to service Internet call requirements is among the contractual obligations shouldered by Telecom in making connections to ISPs and interconnect agreements with other carriers.ISOCNZ can only concur.

It is strongly believed by many in the industry, and by Council, that the 0867 number range is intended primarily to avoid interconnect payments with other carriers for Internet traffic.ISOCNZ recognises the problems associated with per-minute interconnect payments in the context of free local calling and Internet calls.

(a) Does Telecom not consider that it has a responsibility to provide sufficient PSTN capacity to carry all types of traffic, be it Internet, voice or other services?

(b) What plans are in place to ensure that the PSTN and other Internet access methods do have sufficient capacity to meet the demands that will be placed on them in the near future?

(c) Are there alternative arrangements that could be made with other carriers to reduce any perceived unfair imbalance in interconnect payments?

(d) Is there a role for ISOCNZ to assist in negotiating alterations to interconnect agreements, especially as pertaining to Internet traffic?

(e) Is there really a threat from Internet calling patterns to 111 and other essential services?

3. Migration process

ISPs have extreme difficulty with two aspects of the migration to 0867 numbers.The first concern is that the timeframe, seven weeks from the announcement, is simply too short for many ISPs.ISPs will in many cases need to phase in the use of the new numbers to avoid excessive load on possibly already stretched support staffs.

The second concern is that while ISPs expend extra unbudgeted time and money on migration to new dial-in phone numbers, Telecom's own operations do not have to engage in a large change at short notice, and for the period of migration, will enjoy a significant commercial advantage.

ISOCNZ is concerned at the quite significant potential damage to the industry both in terms of resources required to be spent and the reduction of competition to Telecom's own operation due to circumstances inflicted on them by Telecom.

(a) We therefore ask, why is the number change not being managed in such a way that ISPs can migrate as their operations allow to a service that offers actual benefits to the ISPs?

(b) Why is such a short timeframe being used before customers of ISPs who have not migrated to the new numbers are charged?

(c) What level of compensation is Telecom going to offer to ISPs for the damage they will suffer due to the requirement to migrate to 0867 numbers?

(d) How will ISPs can be reassured that Telecom Xtra will be similarly disadvantaged during the changeover period.

4. Definition of "Internet calls"

The material released to date by Telecom has simply referred to the numbers that will be charged to residential callers at 2c/min as "ISP Local Numbers".Clearly, the NZ telecommunications community, not just Internet services providers, require a definition of what constitutes an ISP Local Number, specifically stating what is and is not an ISP.For example, a corporate or tertiary institution's dial-in facility could provide Internet service to staff and/or students as well as its primary functions, and that may indeed be its most used function.

(a) How is an ISP Local Number defined, and what procedures are used to include an existing service into the list of ISP Local Numbers?

(b) How much notice and what compensation will be given to an organisation identified as operating an ISP Local Number and required to change to an 0867 number?

(d) If not, what guarantee is there that other residential users of the PSTN for data or data-like services will not also be charged at 2c/min or required to order new telephone numbers?

(e) Are there any circumstances in which any person or organisation will be denied access to 0867 numbers?

(f) Will new 0867 numbers be charged for, and if so, at what rate?

5. Service Level

Service providers have indicated that they are unhappy with the statement that 0867 numbers will be blocked in times of congestion in favour of other traffic.Providers believe, and ISOCNZ concurs, that this represents a lower level of service than normal PSTN traffic.

Providers are concerned that if calls to ISPs are blocked while other calls are allowed through, the situation will reflect badly on the service provider, even if the service provider has adequately provisioned its equipment and connections to the PSTN.

(a) How will Telecom clearly indicate to a callers failing to get through to their ISP that the call is being blocked due to congestion within Telecom's network?

(b) How has Telecom ascertained that voice calls are of higher value than Internet calls?

(c) Will the Telecom Xtra and IP Net services be subject to the same call management principles as 0867 calls?(d) If not, why not?

(d) Will service level agreements be available to ISPs to ensure their customers are able to get through, and compensate the ISP if they can not?

(e) What guarantee is there that Telecom will maintain sufficient capacity within the PSTN to permit ISPs to operate to full capacity?

(f) How does Telecom justify a reduction in service level without a corresponding reduction in rates charged?

6. Benefits to industry of 0867

ISOCNZ recognises that there are benefits to the Internet industry in adopting 0867, assuming there are sufficient guarantees to ensure the long term stability of these benefits.

Portability of 0867 numbers is seen as promoting competition between carriers for ISP interfacing into the PSTN.What steps are Telecom taking to ensure that this portability will be carried into the future, and into other services?

ISOCNZ would like to discuss how Telecom intends to ensure that neither it nor other carriers are disadvantaged in future by per minute interconnect rates.

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