IOG Meeting Overview - July 2008

The third IOG meeting was held on 10 July. This overview summarises the IOG's monitoring of Telecom's Undertakings compliance, considered by the IOG at that meeting.

Industry Perspective

The Telecommunications Commissioner, Dr Ross Patterson, attended an afternoon session of the meeting, and provided a valuable perspective on a range of matters including the respective roles and processes of the Commerce Commission and the IOG with regard to Telecom's Undertakings compliance.

Update on separation milestones and obligations

Customer service address classification breach

Telecom was required by 30 June 2008, to consult with the Minister for Communications and the Commission, and to provide the Minister with the method by which Telecom will classify customer service addresses into Zones 1, 2, 3a and 3b. On 26 June Telecom informed the Minister that it would not meet this obligation. This is a breach of the Undertakings.

Chorus brand implementation plan

Chorus is required to implement a separate brand progressively within a timeframe agreed by Telecom and the IOG. The IOG agreed to a proposal from Chorus on the implementation of the Chorus brand.

Chorus business plan July 2008 to June 2009

The IOG considered the Chorus corporate and technology plan for the period July 2008 to June 2009, together with certification from the Telecom Board and CEO confirming that the plan and their involvement in the development of the plan complies with the Undertakings, and is consistent with a robust operational separation of Telecom.

Key Performance Indicators (KPIs)

Telecom is required, in consultation with the IOG, to prepare KPIs related to Telecom's compliance with the Undertakings and progress towards compliance, and to have those KPIs considered by the IOG for recommendation to the Telecom Board, if the final product of the consultation process is satisfactory to the IOG.

Telecom has proposed KPIs to the IOG, and the IOG is continuing to work with Telecom to assist in the development of the KPIs.

Update on equivalence milestones

Schedule 1 of the Undertakings sets out 12 programmes of migration plan milestones through which Telecom is required to deliver EOI building blocks, and transition Relevant Services to the required EOI standard.

There were no Schedule 1 milestones due during the reporting period.

The IOG reviewed the status of Schedule 1 milestones due in the next quarter, including EOI Building blocks, the BUBA launch due in July, EUBA milestones due in July and September, and the PSTN migration plan requirement for a vendor or service supply contract for core capability for the primary line voice service (over EUBA or better). The IOG will assess and report on the delivery of these milestones as they fall due.

Assurance reviews

Codes of conduct training

Over 70% of Telecom employees had completed codes of conduct training on compliance with the Undertakings as at 30 June 2008 (with a reported approx. 85% at the time of the IOG meeting on 10 July). Code of conduct training is expected to be made available to contractors who perform the role of employees during July. The IOG will continue to monitor training completion rates, and effectiveness of the codes of conduct training.

Shared information systems – Customer Confidential Information

The Undertakings provide for transitional arrangements until December 2009 for Telecom business units to access customer confidential information held in shared information systems. Telecom is required to develop a plan by 30 September 2008 to upgrade these systems to meet the information sharing requirements by 31 December 2009.

A review by the Support Office found that the development of this plan is underway and that the project is following a logical and robust process. Until this plan is implemented, Telecom is substantially reliant on training, compliance with codes of conduct and manual controls to meet its obligations when using shared information systems. Further assessment will be undertaken when remedial work is underway.

Whistleblowing

Telecom provided its first report to the IOG on breaches and potential breaches of the Undertakings for the period to 20 June. The IOG Support Office is currently investigating reported incidents and will present an update to the IOG in August.

The IOG noted that Telecom launched the Honesty Box on 30 June. The Honesty Box is an online system to enable Telecom employees to report possible breaches of the Undertakings, and to facilitate their disclosure and investigation. The Honesty Box also enables employees to report matters to the IOG.

Complaints

A service provider has complained that a Wholesale UBS promotion reduced the cost of a Telecom Retail broadband promotion, and that Telecom Retail appears to have had knowledge of the Wholesale UBS promotion which was not available to other service providers.

The IOG is completing an Initial Assessment of the complaint and has issued a draft assessment to the service provider.

Complaints process

The IOG complaints process sets out the process for service providers to make complaints to the IOG if they consider Telecom has breached the Undertakings. The complaints process was approved by the IOG, and has since been published on the IOG website.

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