Toll-free local calling for all New Zealanders – including those who live in rural and remote areas – will remain despite an upheaval in the way it is funded.
The Telecommunications Services Obligation (also known as the Kiwi Share) is to be scrapped in favour of a new industry levy. The levy will be collected from all telcos that provide a residential phone service, and is expected to be around $50 million a year. This will be used to subsidise rural providers, so that calls made within local zones in remote areas remain toll-free. The money will form part of the $300 million plan to upgrade rural broadband over the next six years.
Under the old TSO all the money went to one provider – Telecom. This was intended to compensate it for providing phone services to Commercially Non Viable Customers (CNVC) – of which it’s estimated there are 58,000. However, it’s not clear who these customers are. Vodafone, which has previously paid $18 million a year in TSO fees, has asked to see a list of CNVCs, claiming it can provide the services for less money.
“We’re told there are 58,000 customers – five percent of Telecom’s fixed line base – who aren’t commercially viable, yet when we ask to see the list, we’re told there is no list,” says Vodafone CEO Russell Stanners.
A Commerce Commission spokesperson has previously said that it’s worked out by using “geo-coded coordinates which identify locations of commercially non-viable customers as per the Commission’s TSO model”.
As reported in September ConnectMe (see above), Vodafone joined forces with rural ISP Farmside – another vocal opponent of the previous TSO regime – and offered to provide a $500 subsidy for broadband hardware to any CNVC who subscribed to either a Vodafone or Farmside satellite plan.
The company reports dozens of inquiries about the offer, but can’t follow through because it doesn’t know who the customers are.
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