The residential service obligations of the incumbent in New Zealand in 1990

When the New Zealand Government privatised Telecom in 1990, the crucial importance of local telephone service for New Zealand households was recognized through the so-called Kiwi Share Obligations (KSO) that Telecom agreed to at that time. The KSOs required Telecom to ensure the availability and affordability of basic telecommunications services. It is unlikely that the privatisation of Telecom would have taken place without the assurance offered by the KSOs.

The following services were enforced by the original “Kiwi share” in 1990:

  • A local free-calling option for all residential customers to be maintained.
  • Standard residential rental not to be increased in real terms from its level in 1989, provided that overall profitability of regional operating companies is not unreasonably impaired.
  • Line rental for residential users in rural areas to be no higher than the standard residential rental.
  • Telecom to continue to make ordinary residential telephone service as widely available as it is at the date of adoption of these articles in 1990.

The definition of basic telecommunication services has changed since the KSOs were first agreed. In 1990, the emphasis was on residential telephone voice call service. By 2001, it was recognised that dial-up Internet calls were an important feature of the basic services. Aspects of the KSOs were re-negotiated during 2001 as part of the government's review of the telecommunications regulatory environment. The KSOs were re-named Telecommunications Service Obligations (TSO) and enshrined in the regulatory framework established by the Telecommunications Act 2001.

The government's 2006 strategic review of the telecommunications sector identified that accessibility of broadband services in rural areas could be adversely impacted by regulatory reforms. Hence, the TSOs were again put under review starting with a public consultation process in 2007 and continuing under a co-regulatory Working Party established in 2008. The TSO review was signalled as one of a range of measures necessary to future-proof the regulatory regime to technology change and market dynamics. In particular, the Local Service TSO needed to be updated to reflect increased expectations for access to telecommunications services and to ensure that the wider population would benefit from technology enhancements.

Source: NZ Ministry of Commerce 1993, drawing on Telecom’s Articles of Association, Ministry of Economic Development www.med.govt.nz
 

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