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Telecom draft separation plan disappoints - InternetNZ

Media Release – November 23, 2007 - InternetNZ (the Internet Society of New Zealand Inc) today responded to Telecom’s draft operational separation plan, filing a detailed submission that exposes serious deficiencies in Telecom’s proposed approach.

InternetNZ Executive Director Keith Davidson says Telecom’s
draft plan has the potential to severely compromise the intent and viability of
a robust operational separation because it fails to live up to requirements prescribed in
the Government’s Operational Separation determination.

The determination calls for robust Chinese walls,
transparency and behavioural changes regarding the operation of Telecom’s
network access, wholesale and retail divisions. Telecom’s draft plan however
dilutes a wide range of provisions designed to bring about the desired
behavioural changes set out in the determination.

Davidson describes Telecom’s draft undertakings as “death by
a thousand cuts,” saying they lack detail and subtly dilute specific
requirements of the Government’s determination in numerous ways.

“This is a matter of great concern to the industry. The
combination of the multiple departures from the Minister’s requirements have
such a damaging effect that they make the operational separation quite weak. We
call on the Government to review and seek major changes and additions to
Telecom’s implementation plan,” says Davidson.

Perhaps the biggest concern for InternetNZ is reserved for
those sections of the plan that will govern the rollout of future NGN services,
including fibre rollout.

“The determination states that Telecom must include its
detailed commercial policy and plans on access to Fibre-to-the-Premises yet
Telecom’s draft plan contains very little such information.”

InternetNZ urges the Government to consider the formation of
an industry forum similar to NGN UK that provides a mechanism for
industry to develop joint technical and commercial arrangements for NGN
development; and provide an early warning system that would identify emerging
NGN policy issues.

Other areas in which Telecom’s plan falls short are those
relating to governance and the ability of the proposed Independent Oversight
Board to carry out its role effectively.

In another example, the determination forbids wholesale unit
employees from having short term incentives for performance unrelated to
wholesale; yet in Telecom’s draft undertaking up to 80 percent of the wholesale
manager’s incentive can reflect the performance of Telecom as a Group. br />
InternetNZ’s submission, including a detailed Appendix, is
available on the InternetNZ website:

For more information contact:

Keith Davidson
Executive director
021 377 587

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