11 April 2003

Network operator status is not a prerequisite to providing either telecommunications or broadcasting services; that is, these services can be provided without declaration as a network operator. Thus, a person contemplating entering the telecommunications or broadcasting markets is able to provide its services without network operator status.

However, an operator may apply to the Minister for network operator designation under section 103 of the Telecommunications Act if the special rights conferred on network operators, for example access to land, are necessary to enable the applicant to commence or carry on a telecommunications or broadcasting business.

This leaflet outlines the process of network operator designation. It is issued for information purposes, and is not a substitute for the precise wording of section 103 of the Telecommunications Act 2001 or for professional legal advice.

Legislation

The relevant legislation for designation as a network operator are sections 102 to 105 of the Telecommunications Act 2001. Essentially, the purpose of network operator designation "is to facilitate entry into, and competition in, telecommunications markets" (section 102 of the Telecommunications Act 2001).

The most important statutory privilege provided by network operator status is the special rights of access to land, and in particular the road reserve, to lay or construct lines where this is required to commence and carry on a telecommunications business, or a broadcasting business.

Under the Telecommunications Act 2001 the term network operator is used in the following sections:

relating to the protection of networks from the connection of unauthorised equipment (section 106) and the rights to seek damages (section 110) or injunctions (section 111) in the event of the contravention of section 106.
relating to the admissibility of evidence (telecommunication) (section 116).
relating to the rights:

of entry to any land to construct lines (sections 120 to 124): i.e. to appeal to a District Court in the event of unreasonable refusal by a landowner to negotiate terms and conditions for entry;
of entry with respect to existing lines and existing works (sections 125 to 127);
to remove trees (sections 128 to 134);
to construct or repair lines on roads (section 135 to 141);
to request payment for altering lines or works on a road (section 148);
to construct and maintain telephone cabinets, etc on roads (sections 142 to 147); and

relating to the following matters:

monitoring for the purpose of maintaining telecommunications (section 114);
avoiding interference with public traffic (section 149);
compensation for damaged property (section 154); and
protection of title to lines and works (section 155).

To gain these rights a prospective network operator has to apply to the Minister of Communications making a case in terms of section 103 of the Act.

Applications

The processing of applications for designation as a network operator is managed by the Telecommunications Policy Group, Ministry of Economic Development, which advises the Minister of Communications.

Section 103 reads:

103 Ministerial requirements for declaration

The Minister must declare an applicant to be a network operator for the purposes of this Act or any provisions of this Act if the Minister is satisfied that a declaration is necessary to enable the applicant to commence or carry on a business providing-

(a) facilities for telecommunication between 10 or more other persons that enable at least 10 of those persons to communicate with each other; or

(b) facilities for broadcasting to 500 or more other persons that enable programmes to be transmitted along a line or lines to each of those persons.

The Minister must be satisfied that network operator status is necessary. In this regard, the Minister must be satisfied that without the declaration granting network operator status the applicant would not be able to commence or carry on a business providing facilities for telecommunication between, or broadcasting to the required number of persons. Further, the Minister must be satisfied that the applicant's proposal will, in fact, place it in the business of providing the facilities contemplated in section 103.

To assist the processing of applications, it is suggested that applications include:

details of how the declaration granting network operator status is necessary;
details of the actual business to be provided, including anticipated customer levels;
a copy or details of the company's business plan, showing how the business development is to proceed;
details of costings and financial planning regarding the development and implementation of the proposal;
details of geographic areas in which cable laying will be necessary, and
the number of customers that will be reached by that cable.

The Minister should also be assured that any application for network operator is substantial. To this end any application should also include:

a copy of the company's certificate of incorporation, (this is essential to establish that the company is a legal entity);
a list of the company's managers, directors, and major shareholders; and
a brief company history.

Assuming the information provided is complete, the Ministry of Economic Development will prepare a report to the Minister. If the Minister is satisfied that the application meets the criteria specified in the Act, the Minister will make a declaration by in the Gazette that the applicant is a network operator for the purposes of the Telecommunications Act 2001. Declaration as a network operator does not imply Government endorsement of the company's business proposal.

Section 104 of the Act provides that the Minister must revoke a declaration if the Minister is satisfied that a network operator has ceased to provide facilities for telecommunications or broadcasting. A declaration is revoked by notice by notice in the Gazette.

The Ministry is willing to answer any questions or to meet with prospective applicants. Inquiries about the process should be directed to:

The Manager
Telecommunications Policy
Energy and Communications Branch
Ministry of Economic Development
PO Box 1473
WELLINGTON
Telephone: 04-472 0030
Facsimile: 04-499 0797