The Telecommunications Forum Needs Modernising
Telecommunications reform has been one of New Zealand’s great success stories of the past twenty years. The new century began with the ugliest of all monopolies in the fixed line market and a comfortable duopoly in mobile, giving New Zealand consumers the worst and dearest phone and broadband service in the OECD except Mexico.
Yet two decades on we have, arguably, a more diverse and competitive market than any other country our size. High quality legislation, with political consensus and regulation through the Commerce Commission is popularly, and accurately, credited with the transformation.
Working alongside the Commission, relatively unsung, has been the Telecommunications Forum. It boasts an impressive scope of work – industry Codes, workstreams, and incredibly detailed frameworks enabling the most complex network industry on the planet to work together. That work enables consumers to dance around among
different networks and technologies with scarcely a thought. The Forum in its own right, is a great success story.
But it needs to modernise.
I was part of the action when government urged the industry to form a forum in 2001/2. The concept was greeted with alacrity by all the competitor networks. But ugly incumbent Telecom received it with utter loathing - Telecom at that time, without regulation, had become the de facto regulator of its competitors and had no wish to lose that commanding role.
Telecom used every means to frustrate and delay. At one stage several months into tortuously devising a forum structure, the rest of the industry arrived at a scheduled meeting in Wellington to find that the General Manager who had been representing Telecom in the discussions was absent and had been replaced by several in-house lawyers, who informed the rest of us that the legal department was now taking over the negotiations and Telecom was rescinding everything that had been agreed thus far. That typified the times.
Despite that, a few months on the group established what became a highly-effective body. It worked systematically through a raft of issues of mind-boggling complexity – number portability, wholesaling, infrastructure sharing, local loop unbundling, and dozens more.
Key to the Forum’s success were several foundation elements. First, a very effective, strong and completely independent chair. Second, a purpose statement founded on “the long term benefit of end users”. Third, an end user representative on the Board to make sure the public interest was to the forefront.
Then around 2014, something changed. The government relations and technical people who had populated the Board of the Forum were pushed aside, and the Chief Executives of the major telcos personally took their place. A previous prohibition stopping the Forum from taking a representational role in any public or policy debate was reversed - replaced by a requirement to represent industry-agreed views to third parties. That expanded the Forum from a standards-setting body to a lobby group. Maybe that’s ok – lots of industry groups do just that.
But around that time too, both the user representative and independent Chair roles were discontinued. From operating in a climate of transparency, the Forum now had the look of a closed shop for the heavyweight telcos, rather than an open, welcoming home for firms of all sizes.
The Achilles heel is around membership. These days consumers can choose from around 100 retail service providers – including the WISP (Wireless Internet Service Provider) group with which I am associated which has 36 in its own right. Yet the membership of the Forum, according to the “Members Brands” page of its Web site, comprises less than 20 entities.
Where are all the rest?
This is an industry where the size disparity between biggest and smallest is massive, so if measured by market share the Forum looks better. But as in many industries, the smaller guys are the innovators. WISPs for example now provide broadband to more than half New Zealand’s farms – a stunning success story. Yet their achievements are loftily ignored in the Forum’s annual report, and none have so far felt able to be full Forum members. They should be in there with a viable fee structure and a place at the table. Sure, there is an entry path for the smaller guys at a “Tier 4” level, but they get precious little influence in return.
So Forum – a big bouquet, with a crucially important brickbat. Your structure needs to reflect the shape of your industry in the modern day, with a workable balance between acknowledging disparate company sizes while ensuring a voice for all. Time to get with the times.
DISCLAIMER - These views are solely my own and do not necessarily reflect the position of any group I am associated with.IS