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The contentious telecommunications service obligations (TSO) system, which requires certain services to be provided to meet social objectives, is in for a shake-up.
Communications and Information Technology Minister David Cunliffe today said he had called for a fundamental review of the local service TSO.
There are two TSO instruments, the local residential telephone service and the telecommunications relay service.
A key conclusion from a government TSO review was that reform of the local service TSO had to be "back to basics", Mr Cunliffe said today.
"Industry feedback has made clear that the existing arrangements for the local service TSO are seen as clumsy, time-consuming and an expensive tax on entrants."
Other issues included a lack of openness to contestable entry, and low minimum speed requirements. "A key issue for discussion is whether a fundamental overhaul reflecting the spirit of the original Kiwi Share is now in order."
Mr Cunliffe said that at a meeting today of the Telecommunications Carriers Forum he had questioned whether rural service aspects of the TSO should be made fully contestable and technology neutral, and whether it should be upgraded to cover basic broadband.
"I welcome Telecom's willingness to discuss entering into commitments for investing all TSO revenue from other carriers as new capital expenditure targeted at low population rural areas, and to leave `no stone unturned' for improving rural broadband."
Further discussion would take place in coming months with industry and consumer groups.
Mr Cunliffe said he intended to bring the policy review phase of the TSO review to a conclusion during the present term of government.