(1) This determination determines further requirements with which the separation plan under Part 2A of the Act must comply.

(2) These requirements are additional to those in section 69D of the Act (which provides that the separation plan must require a robust operational separation of Telecom, including undertakings to achieve things specified in that section in respect of relevant services).

(1) The separation undertakings must specify a separation day or a method of determining the separation day.

(2) The separation day must not be later than 31 March 2008.

(3) The separation undertakings must bind Telecom to comply,—

• (a) on and after the separation day, with all of the following requirements:

  • (i) clause 17 (which requires the ANS unit to be established as a separate division):

  • (ii) clause 21 (which requires, among other things, responsibility for local loop unbundling operations to be transferred to the ANS unit):

  • (iii) clauses 29 and 42 (which require the ANS unit manager and staff to be appointed):

  • (iv) clause 31 to the extent that it requires an ANS unit business plan for the balance of the 2007/08 financial year to be approved by the TCNZ board:

  • (v) clause 34 (which requires the ANS unit to act in its own best interests):

  • (vi) clause 40(1) (which requires the ANS unit's accommodation to be access-controlled):

  • (vii) clause 41 (which requires a separate ANS brand):

  • (viii) clause 47 (which requires the wholesale unit to be established):

  • (ix) clause 48(1) (which requires the wholesale unit to have all necessary arrangements in place to give it sufficient influence over the assets that provide relevant wholesale services):

  • (x) clauses 58 and 67 (which require the wholesale unit manager and staff to be appointed): ­

  • (xi) clause 66 (which requires the wholesale unit's accommodation to be access-controlled):

  • (xii) clauses 80 and 81 (which require the IOG to be established and its members appointed):

  • (xiii) clauses 84 and 85 (which require the IOG support office to be established and key staff appointed):

  • (xiv) clause 87(1)(b) (which requires draft codes of conduct to be prepared):

  • (xv) clauses 37, 38, 63, and 64 (which require policies governing customer confidential information and commercial information flows to be in place for the ANS unit and the wholesale unit); and

• (b) on and after 1 July 2008, with all of the requirements of this determination.

(4) Subclause (3) is subject to—

• (a) clauses 24 and 51 (which relate to the start dates for equivalence of inputs requirements); and

• (b) clause 40(2) (which relates to the requirement that employees of the ANS unit must be located in accommodation which is separately located from all other Telecom business units); and

• (c) clause 41(c) (which relates to branding); and

• (d) any other reasonable transitional provisions that are included in the separation undertakings and that relate to specific issues that—

  • (i) are identified in the separation undertakings; and

  • (ii) reasonably justify a different transitional regime in respect of those issues (for example, issues involving events beyond Telecom's control, inordinate expense, or unacceptable technical complexity).

The following telecommunications services, or types of telecommunications services, are specified as relevant services under sections 69C and 69F(2)(b) of the Act:

• (a) the relevant network access services referred to in clause 21(2); and

• (b) the relevant wholesale services referred to in clause 49(2).

When this determination refers to a Telecom business unit, the determination applies to the Telecom business unit to the extent to which the unit provides, purchases, or is otherwise involved with relevant services.

When the arm's-length rules refer to activities and decisions, the arm's-length rules apply to the activities or decisions to the extent to which they relate to or affect relevant services.

This determination does not require Telecom to provide access to any service that it is not required to provide under Part 2 of the Act, a Telecom registered undertaking, or any other law, even if a business unit provides that service to another Telecom business unit.

(1) In this determination, unless the context otherwise requires, equivalence of inputs or EOI—

• (a) means that, if Telecom is required to provide a relevant service to an access seeker,—

  • (i) Telecom must provide the access seeker and Telecom itself with the same service; and

  • (ii) Telecom must deliver that service to the access seeker and to Telecom itself on the same time-scales and on the same terms and conditions (including price and service levels); and

  • (iii) Telecom must deliver that service to the access seeker and to Telecom itself by means of the same systems and processes (including operational support processes); and

  • (iv) Telecom must provide the access seeker and Telecom itself with the same commercial information about those services, systems, and processes; and

• (b) includes, if Telecom is required to provide a relevant service to an access seeker, the use by Telecom of services, systems, and processes that access seekers must be able to use in the same way, and with the same degree of reliability and performance, as those services, systems, and processes are used by Telecom; and

• (c) is subject to clause 8.

(2) In subclause (1), the same means exactly the same, subject only to—

• (a) trivial differences; and

• (b) differences relating to—

  • (i) credit requirements and vetting procedures:

  • (ii) payment procedures:

  • (iii) matters of national and crime-related security, physical security, security required to protect the operational integrity of the network, or any other security requirements agreed by Telecom and the Commission:

  • (iv) provisions relating to the termination of supply:

  • (v) contractual provisions relating to dispute resolution (to the extent necessary because Telecom is one company):

  • (vi) requirements for a safe working environment; and

• (c) differences that are agreed by Telecom and the Commission in writing; and

• (d) differences that are specified elsewhere in this determination; and

• (e) differences relating to terms required by a residual terms determination under subpart 2A of Part 2 of the Act.

In this determination, unless the context otherwise requires, resale equivalence means, in relation to a particular resale service, that—

• (a) the service characteristics and functionality of the resale service must be the same (except for trivial differences) as the service characteristics and functionality of the corresponding retail service; and

• (b) the operational systems, processes, and procedures used by Telecom to supply the resale service must give access seekers the ability to provide end-users with the same or a substantially similar service delivery experience to that experienced by Telecom's end-users of the corresponding retail service; and

• (c) overall, the operational systems, processes, and procedures used by Telecom to supply the resale service must not place access seekers at a material disadvantage, when compared to the operational systems, processes, and procedures used by Telecom to supply the corresponding retail service to Telecom's end-users.

(1) In this determination, unless the context otherwise requires,—

(2) References in this determination to Telecom's access network, Telecom's local access network, or Telecom's regional backhaul network—

• (a) include a reference to those networks as they may be modified or upgraded, or replaced in part, from time to time; but

• (b) do not include a reference to a network of an entirely different type that is installed in substitution for any of those networks and that is not of a type that is referred to in the access network definition.

(3) Any term or expression that is defined in the Act and used, but not defined, in this determination has the same meaning as in the Act.

(1) An example used in this determination is only illustrative of the provisions to which it relates. It does not limit those provisions.

(2) If an example and a provision to which it relates are inconsistent, the provision prevails.

(1) This determination deals with the way in which required Telecom business units are managed or structured, and the type of relationships, dealings, and transactions the units have.

(2) The arm's-length rules apply in respect of all of Telecom, including all business units and Telecom personnel, as follows:

• (a) clause 14 contains rules of general application which apply to all Telecom personnel:

• (b) clause 15 contains carve-outs for the TCNZ board and the TCNZ chief executive:

• (c) specific arm's-length rules that apply to each specific business unit are contained in the Part that relates to that unit:

• (d) Part 7 contains carve-outs for shared groups and services.

(1) The separation undertakings must provide that Telecom personnel must act in a way that gives effect to Part 2A of the Act, this determination, and the separation undertakings.

(2) The separation undertakings must provide that a Telecom employee must not, in doing or omitting to do anything, discriminate in favour of one required Telecom business unit (or its customers, suppliers, or employees) at the expense of another required Telecom business unit (or its customers, suppliers, or employees).

(3) To avoid doubt, subclause (2) does not prevent an employee of one required Telecom business unit from discriminating in favour of that unit.

(4) The separation undertakings must provide that no employee of Telecom who is not working for the ANS unit may,—

• (a) except through mechanisms and processes that are also available to all other service providers on an equal basis, directly or indirectly participate in the formulation or making of—

  • (i) the annual and long-term corporate plans and technology plans of the ANS unit; or

  • (ii) other plans of the ANS unit; or

  • (iii) the commercial policy of the ANS unit; or

• (b) have access to ANS unit commercial information unless that information is also available to all other service providers on an equal basis; or

• (c) have access to ANS unit customer confidential information unless the service provider that provided the information consents.

(5) The separation undertakings must provide that no employee of Telecom who is not working for the wholesale unit may,—

• (a) except through mechanisms and processes that are also available to all other service providers on an equal basis, directly or indirectly participate in the formulation or making of—

  • (i) the annual and long-term corporate plans and technology plans of the wholesale unit; or

  • (ii) other plans of the wholesale unit; or

  • (iii) the commercial policy of the wholesale unit; or

• (b) have access to wholesale unit commercial information unless that information is also available to all other service providers on an equal basis; or

• (c) have access to wholesale unit customer confidential information unless the service provider that provided the information consents.

(6) This clause is subject to the exceptions set out in this determination (for example, clauses 15, 37(2), 38(2), 90, and 91).

(1) This determination does not limit—

• (a) the duty of the TCNZ board or the role of the chief executive of TCNZ, when exercising powers or performing duties as a director or chief executive of TCNZ, to act in a manner that he or she believes is in the best interests of TCNZ; or

• (b) the role of any required Telecom business unit to act in accordance with the directions of the TCNZ board or the chief executive of TCNZ.

(2) Subclause (1) applies even though the act is one that the required Telecom business unit may not itself resolve to do under the separation undertakings (for example, in the case of the ANS unit, an act that is not in the best interests of the ANS unit).

(3) However, the separation undertakings must provide that if the TCNZ board or the chief executive of TCNZ wishes a business unit to act in a way that the unit may not itself resolve to do, the person must—

• (a) give a direction in writing to the required Telecom business unit to act in that way; and

• (b) give a copy of the direction to the Commission and the IOG, as soon as practicable after the direction is given; and

• (c) certify to the Commission and the IOG that, in the person's opinion,—

  • (i) the direction is consistent with the robust operational separation of Telecom; and

  • (ii) the reason that the direction is given is that it is in the best interests of TCNZ as a whole; and

• (d) report to the Commission and the IOG on whether the direction undermines any of the purposes set out in paragraphs (a) to (c) of section 69A of the Act.

(4) Subclause (5) applies—

• (a) if the TCNZ board or the chief executive of TCNZ participates in a decision related to the ANS unit or the wholesale unit:

• (b) for the purpose of ensuring that any decisions made as a result of that participation are transparent.

(5) The separation undertakings must provide that—

• (a) Telecom must provide the IOG with copies of the final documentation (including the formal recommendation) provided to, and considered by, the TCNZ board or the chief executive of TCNZ, along with the documentation that records any decisions made, in respect of the following matters:

  • (i) an investment matter involving capital expenditure in excess of the amount that the manager of the ANS unit or the wholesale unit (as the case may be) has the delegated financial authority to approve:

  • (ii) a material aspect of the development or introduction of a relevant network access service that will be provided to service providers:

  • (iii) any material change to the overall size or reach of the access network or to access network technologies:

  • (iv) any matter that materially impacts on the operation of the separation undertakings; and

• (b) in any other case, Telecom must, on request by the IOG, provide the IOG with copies of the final documentation (including the formal recommendation) provided to, and considered by, the TCNZ board or the chief executive of TCNZ, along with the documentation that records the decisions made; and

• (c) Telecom must, as soon as practicable, notify the Commission in writing of any provision of documentation to the IOG under this subclause.

(1) This Part sets further requirements about the fixed network access service business unit referred to in section 69D(1)(a)(i) of the Act.

(2) That unit is called the Access Network Services unit or ANS unit in this determination.

The separation undertakings must require the establishment of the ANS unit.

(1) The separation undertakings must provide that the ANS unit must control the access network and the operation of that network.

(2) In this determination, unless the context otherwise requires,—

(3) The separation undertakings must provide that all arrangements between the ANS unit and other Telecom units or persons that provide for the ANS unit to control the access network and the operation of that network must be in writing, including all the terms of the arrangement, including price or appropriate transfer charges.

(4) The separation undertakings must provide that the ANS unit must give a copy of the documents relating to the arrangement to the IOG, as soon as practicable after the later of the date on which the separation undertakings bind Telecom in this respect and the date that the arrangement is entered into or changes in any material respect.

(1) The separation undertakings must provide that the ANS unit must have sufficient influence over the network assets that are not under the control of that unit in order to discharge its responsibilities under these requirements in relation to delivery of relevant network access services.

(2) The separation undertakings must provide that all arrangements between the ANS unit and other Telecom units or persons that provide for the ANS unit to have influence over network assets must be in writing, including all the terms of the arrangement, including price or appropriate transfer charges.

(3) The separation undertakings must provide that the ANS unit must give a copy of the documents relating to the arrangement to the IOG, as soon as practicable after the later of the date on which the separation undertakings bind Telecom in this respect and the date that the arrangement is entered into or changes in any material respect.

The separation undertakings must ensure that the ANS unit must, without limitation, be responsible for—

• (a) building, maintaining, operating, and repairing the access network:

• (b) making investment decisions relating to the access network:

• (c) determining which services the access network assets must be capable of supporting:

• (d) determining what enhancements to the functionality of the access network assets are appropriate.

(1) The separation undertakings must provide that the ANS unit must provide the relevant network access services.

(2) In this determination, unless the context otherwise requires, relevant network access services—

• (a) means any current or future fixed telecommunications services that are delivered exclusively or mainly by use of assets that form part of the access network:

• (b) does not include—

  • (i) relevant wholesale services:

  • (ii) the access service of interconnection with Telecom's fixed PSTN, or the access service of interconnection with a fixed PSTN other than Telecom's:

  • (iii) any multinetwork services that are listed in Schedule 1 of the Act:

  • (iv) to avoid doubt, any regulated mobile services.

(1) The separation undertakings must ensure that the ANS unit's responsibilities include, in particular, the following matters in relation to relevant network access services:

• (a) service management:

• (b) providing a wholesale sales function (including sales to other units within Telecom):

• (c) product management and marketing:

• (d) network performance management:

• (e) specification of the services and their functionality:

• (f) deployment of services, including design, construction, testing, and commissioning:

• (g) service-related procurement processes:

• (h) setting of terms, including prices.

(2) This clause is subject to the Commission's responsibilities under the Act.

(1) The separation undertakings must contain Telecom's commercial policy for access to the relevant network access service known as fibre to the premises.

(2) That policy may refuse access to that service if the service provider refuses to supply Telecom with similar services in circumstances where—

• (a) the service provider is capable of supplying materially the same service; and

• (b) the circumstances of Telecom and the service provider are materially the same; and

• (c) Telecom offers to access the service on materially the same terms and conditions; and

• (d) Telecom has requested the supply of the service in writing; and

• (e) it is reasonable and appropriate and in keeping with Telecom's obligations under Part 2A of the Act, this determination, and the separation undertakings.

(1) The separation undertakings must provide that the ANS unit must provide each relevant network access service on the applicable standard of equivalence in accordance with Schedule 1.

(2) The separation undertakings must provide that the standard of equivalence that applies to all relevant network access services is equivalence of inputs.

(3) The separation undertakings must include migration plans for the ANS unit in accordance with Schedule 1.

(4) This clause is subject to clauses 25 and 26 and Schedule 1.

(1) Subclause (2) applies if—

• (a) a relevant network access service becomes regulated after the commencement of this determination; and

• (b) the Commission recommends to the Minister that a different standard of equivalence should apply and states what that standard of equivalence should be; and

• (c) the Minister consults with Telecom about the Commission's recommendation; and

• (d) the Minister accepts the Commission's recommendation.

(2) The separation undertakings must provide that—

• (a) the standard of equivalence recommended by the Commission applies to that service; and

• (b) Telecom must make the recommendation and information about its effect available to the public at all reasonable times on Telecom's Internet website.

(1) The purpose of this clause is to provide for migration plans for legacy services, as an alternative to rebuilding them.

(2) In this determination, legacy services means all of Telecom's fixed telecommunications services as at the date of this determination that access a relevant network access service that must be provided on an equivalence of inputs basis in accordance with this determination.

(3) The separation undertakings may, in the case of legacy services, contain 1 or more migration plans that are designed to move those services to an EOI compliant infrastructure on a timetable and using a migration strategy that is tailored for the service concerned and, if so, the separation undertakings—

• (a) must require Telecom to comply with those migration plans; and

• (b) must provide that,—

  • (i) if (in the Minister's opinion) Telecom fails in any material respect to comply with a migration plan, the Minister may by written notice to Telecom require Telecom to remedy the non-compliance; and

  • (ii) if within 60 working days of receiving the notice Telecom fails to remedy the non-compliance to the Minister's satisfaction, the Minister may void the plan by written notice to Telecom; and

  • (iii) if the plan is voided under subparagraph (ii), Telecom must meet the arrangements for EOI migration milestones and dates for the relevant services specified in Schedule 1.

(4) The separation undertakings must include migration plans for the ANS unit in accordance with Schedule 1.

(1) The separation undertakings must provide that the ANS unit must build all relevant network access services and associated systems that are not regulated at the commencement of this determination in such a manner as to ensure that access seekers can purchase those services from the ANS unit on an equivalence of inputs basis in the event that the services become regulated.

(2) The separation undertakings under subclause (1) may apply except to the extent to which the Commission agrees to minor exceptions.

(1) The separation undertakings must provide that Telecom must operate the ANS unit on a stand-alone basis, at arm's-length from any other Telecom business unit.

(2) This includes having relationships, dealings, and transactions that do not include elements that parties in their respective positions would usually omit, and that do not omit elements that parties in their respective positions would usually include, if—

• (a) the parties were acting independently; and

• (b) one party (the ANS unit) were acting on a stand-alone basis; and

• (c) the parties were acting at arm's-length.

(3) Arm's-length also includes compliance with the other arm's-length rules.

(4) This clause does not limit the ordinary meaning of the expression arm's-length.

(1) The separation undertakings must provide that Telecom must appoint a person to have responsibility for the management of the ANS unit.

(2) The separation undertakings must provide that the person must—

• (a) work solely on matters pertaining to the ANS unit and must not have any responsibility for other units within Telecom:

• (b) manage the ANS unit in a way designed to secure compliance with the provisions of the separation undertakings that apply to the unit:

• (c) report directly to the chief executive of TCNZ.

The separation undertakings must provide that no person who is an employee working for the ANS unit may work for any other Telecom business unit.

(1) The separation undertakings must provide that the ANS unit must develop, and submit to the TCNZ board for approval, annual and long-term corporate plans and technology plans (or equivalent documents) for the ANS unit or the parts of Telecom plans that relate to the ANS unit.

(2) The separation undertakings must provide that the TCNZ board may approve, amend, or otherwise deal with those plans as it sees fit, provided that it complies with the requirements set out in clause 15.

(1) The separation undertakings must provide that the following must be solely the responsibility of the ANS unit:

• (a) the implementation of the plans approved by the TCNZ board under clause 31; and

• (b) the day-to-day management of the ANS unit.

(2) The separation undertakings must provide that the manager of the ANS unit must have sufficient delegations from the TCNZ board to allow him or her to manage the ANS unit in accordance with subclause (1).

(3) The separation undertakings must—

• (a) provide that this delegation must be not less than a level 2 (chief operating officer equivalent) delegation; and

• (b) attach a document that describes the terms of this delegation; and

• (c) prohibit any decrease in the delegation from that described in the document attached to the separation undertakings; and

• (d) require Telecom to notify the IOG and the Commission of any changes in the delegation; and

• (e) require the TCNZ board and the chief executive of TCNZ to certify annually that ANS has sufficient resources to enable the manager of the ANS unit to manage the ANS unit in accordance with subclause (1).

The separation undertakings must provide that the ANS unit must formulate its own commercial policies.

The separation undertakings must provide that all ANS unit employees, agents, and contractors must, when making their decisions in relation to relevant network access services, act in good faith and in what they believe to be in the best interests of the ANS unit.

(1) The separation undertakings must provide that the ANS unit and all its employees and agents must, when doing or omitting to do anything in relation to the supply of relevant network access services to persons who have or seek access to relevant services (whether other Telecom units or other service providers), act in a way that does not discriminate between those persons.

(2) This clause is subject to clause 8.

(1) The separation undertakings must provide that all transactions between the ANS unit and any other Telecom business unit for the provision by the ANS unit of relevant network access services must be in writing and include all the terms of the transaction, including price or appropriate transfer charges.

(2) The separation undertakings must provide that the ANS unit must give a copy of the transaction documents to the IOG as soon as practicable after the transaction is entered into.

(1) The separation undertakings must provide that the ANS unit and all its employees, agents, and contractors must not disclose customer confidential information to any other Telecom business unit unless the service provider to which the information relates consents.

(2) However, the separation undertakings may permit any disclosure that—

• (a) is necessary operationally to enable the ANS unit to provide a relevant service in accordance with its obligations under the separation undertakings; or

• (b) is made in order to transfer an order for a relevant service from the ANS unit to the wholesale unit (or vice versa) in accordance with arrangements made to comply with clause 94.

(1) The separation undertakings must provide that the ANS unit and all its employees, agents, and contractors must not disclose ANS unit commercial information to any other Telecom business unit unless that information is also available to all other service providers on an equal basis.

(2) However, the separation undertakings may permit any disclosure that—

• (a) relates to relevant network access services that are neither regulated nor supplied to a service provider other than Telecom; or

• (b) is necessary operationally to enable the ANS unit to provide a relevant service in accordance with its obligations under the separation undertakings; or

• (c) is made in order to transfer an order for a relevant service from the ANS unit to the wholesale unit (or vice versa) in accordance with arrangements made to comply with clause 94.

(1) The separation undertakings must provide that all incentive remuneration for employees working for the ANS unit must reflect solely the objectives and performance of the ANS unit.

(2) The separation undertakings must provide that remuneration for employees working for the ANS unit must not comprise any Telecom shares or any incentives that are directly or indirectly linked to Telecom's overall performance.

(3) The separation undertakings must provide that these requirements must apply to both short-term incentive schemes (such as annual bonuses) and long-term incentive and remuneration schemes.

(1) The separation undertakings must provide that all employees working for the ANS unit must be located in access-controlled accommodation that is separately secured from all other Telecom business units.

(2) The separation undertakings must provide that after 12 months after the separation day all employees working for the ANS unit must be located in accommodation that is separately located from all other Telecom business units.

(3) However, the separation undertakings may provide that subclause (2) does not apply to an employee if—

• (a) the employee works in a place where Telecom does not have a significant number of employees; and

• (b) the Commission has agreed, on application by Telecom, that—

  • (i) it would be impractical or unreasonably expensive to comply with the requirement in this clause in relation to that employee; and

  • (ii) appropriate alternative procedures are in place in relation to the employee in order to ensure compliance with the arm's-length rules.

The separation undertakings must require the ANS unit to have, and only use, its own separate brand in accordance with the following requirements:

• (a) the brand must not include the word Telecom; and

• (b) the brand may be used in proximity to an endorsement containing either the word Telecom or the Telecom logo, or both, only if that endorsement is secondary to the ANS brand; and

• (c) branding for the ANS unit must change progressively to the new separate ANS brand within a time frame agreed between Telecom and the IOG.

The separation undertakings must ensure that the following persons must be employees of Telecom who work solely for the ANS unit:

• (a) all employees who are directly involved in the provision, installation, maintenance, fault restoration, and repair of Telecom's access network, except to the extent that those persons work for shared services; and

• (b) all employees who are directly involved in the planning, design, implementation, and in-life service management of relevant network access services, except to the extent that those persons work for shared services; and

• (c) all employees who are directly involved in providing a wholesale sales function in relation to relevant network access services; and

• (d) the managers of the employees referred to in paragraphs (a) to (c), up to and including the manager of the ANS unit; and

• (e) those employees who carry out activities that are ancillary to those described in any of paragraphs (a) to (c); and

• (f) all employees who are directly involved in providing legal or regulatory advice to the ANS unit.

(1) The separation undertakings must ensure that the ANS unit must consult with service provider customers if the ANS unit consults with any Telecom business unit before making any significant decision that may affect relevant network access services in relation to—

• (a) changes to the access network:

• (b) changes to the specifications or functionality of any relevant network access service:

• (c) introduction of any new relevant network access service or any variant of an existing relevant network access service.

(2) The separation undertakings must ensure that the extent of the consultation, and the time when consultation occurs, must be equivalent for all service provider customers and Telecom's other business units.

The separation undertakings must provide that, if the ANS unit chooses to supply a service provider (other than Telecom) with a relevant service that it is not required to provide under Part 2 of the Act, a Telecom registered undertaking, or any other law, then the ANS unit must supply that service to the other service provider on commercial terms in accordance with the non-discrimination rule in clause 35.

(1) The separation undertakings must ensure that the ANS unit must establish a process for making, considering, advising, and implementing decisions about requests in respect of relevant network access services, and in respect of assets controlled by the ANS unit, whereby—

• (a) all persons who have or seek access to relevant network access services (whether other Telecom business units or access seekers) use the same request form; and

• (b) the process is substantially the same for all those persons, in like circumstances; and

• (c) the process is subject to oversight by the IOG, including reviewing whether requests have been dealt with in accordance with the process.

(2) This clause is subject to clause 8.

(1) This Part sets further requirements about the 1 or more business units referred to in section 69D(1)(a)(ii) of the Act that must provide a wholesale function for all relevant services (except to the extent that a wholesale function is provided by the ANS unit).

(2) The unit or units are together called the wholesale unit in this determination.

The separation undertakings must require the establishment of the wholesale unit.

(1) The separation undertakings must require the wholesale unit to be a party to arrangements with other Telecom units or persons that give the wholesale unit sufficient influence over the assets necessary for the provision of relevant wholesale services.

(2) The separation undertakings must provide that all arrangements between the wholesale unit and other Telecom units or persons that provide for the wholesale unit to have influence over network assets must be in writing, including all the terms of the arrangement, including price or appropriate transfer charges (if any).

(3) The separation undertakings must provide that the wholesale unit must give a copy of the documents relating to the arrangement to the IOG, as soon as practicable after the later of the date on which the separation undertakings bind Telecom in this respect and the date that the arrangement is entered into or changes in any material respect.

(1) The separation undertakings must require the wholesale unit to provide the relevant wholesale services.

(2) In this determination, unless the context otherwise requires, relevant wholesale services—

• (a) means,—

  • (i) in relation to resale services, only those services that are included in DSPL or RSPL, including any replacement or successor services that are added to DSPL or RSPL, and any resale services that are covered by a future determination under Part 2 of the Act:

  • (ii) all other designated access services and specified services that are listed in Schedule 1 of the Act (regardless of whether there is a determination under Part 2 of the Act currently in force in relation to that service):

  • (iii) any fixed network service that is subject to a Telecom registered undertaking:

  • (iv) all packet-based bitstream services (and their associated functions, including the associated functions of Telecom's operational support systems) that enable access to, or interconnection with, Telecom's NGN core:

• (b) does not include—

  • (i) relevant network access services:

  • (ii) the designated access service of interconnection with Telecom's fixed PSTN or the designated access service of interconnection with a fixed PSTN other than Telecom's:

  • (iii) any designated multinetwork services that are listed in Schedule 1 of the Act:

  • (iv) to avoid doubt, any regulated mobile services.

(2A) The interconnection with Telecom's NGN core referred to in subclause (2)(a)(iv) includes any IP interconnection services that become a designated service or specified service after the commencement of this determination.

(2B) Subclause (2A) does not limit the generality of subclause (2)(a)(iv).

(2C) The interconnection with Telecom's NGN core referred to in subclause (2)(a)(iv) includes—

• (a) IP interconnection for voice services; and

• (b) IP interconnection for virtual private network services.

(2D) Subclause (2C) does not limit the generality of subclause (2)(a)(iv).

(3) In this clause, NGN means a packet-based network—

• (a) which is able to—

  • (i) provide telecommunications services; and

  • (ii) make use of multiple broadband and quality of service-enabled transport technologies; and

• (b) in which service-related functions are independent of underlying transport-related technologies.

(4) To avoid doubt, it is expected that there will be further industry discussion on an approach to peering, and that the definition of relevant wholesale services does not require a particular industry-wide approach to that issue.

(1) The separation undertakings must provide for a consultation process between Telecom and service providers about the approach to IP interconnection services.

(2) The consultation must cover, at a minimum,—

• (a) the process for transitioning from fixed PSTN interconnection for voice services to IP interconnection for voice services; and

• (b) the introduction of IP interconnection for virtual private network services.

(3) The separation undertakings must require Telecom to publish a plan for addressing the issues arising from the consultation process.

(1) The separation undertakings must ensure that the wholesale unit's responsibilities include, in particular, the following matters in relation to relevant wholesale services:

• (a) service management:

• (b) providing a wholesale sales function (including sales to other units within Telecom):

• (c) product management and marketing:

• (d) network performance management, to the extent that the wholesale unit controls the relevant assets:

• (e) design and specification of the services and their functionality:

• (f) service-related procurement processes:

• (g) setting of terms, including prices.

(2) This clause is subject to the Commission's responsibilities under the Act.

(1) The separation undertakings must provide that the wholesale unit must provide each relevant wholesale service on the applicable standard of equivalence in accordance with Schedule 1.

(2) The separation undertakings must provide that the standard of equivalence that applies to all relevant wholesale services is equivalence of inputs, except as otherwise provided in clauses 52 to 54.

(3) The separation undertakings must include migration plans for the wholesale unit in accordance with Schedule 1.

(4) The separation undertakings in respect of the wholesale unit must reflect the effect of clause 26 on relevant wholesale services.

(1) The separation undertakings must provide that the standard of equivalence that applies to resale services is the resale equivalence standard.

(2) However, the separation undertakings may provide that a different standard of equivalence applies to any of those resale services if—

• (a) the wholesale unit and the access seeker have agreed to the application of the different standard; and

• (b) the Commission has been advised of the application of the different standard and has not objected to it.

(3) The separation undertakings may provide that Telecom has a reasonable time, after being notified of any failure to meet the resale equivalence standard, to meet that standard provided that—

• (a) Telecom must have agreed with the Commission what a reasonable time would be in the circumstances of the case; and

• (b) Telecom takes all reasonable steps during that period to try to achieve compliance; and

• (c) the failure to meet the standard is inadvertent.

The separation undertakings must include a list of the improvements that Telecom undertakes to make to resale services for the purposes of meeting the resale equivalence standard, and the dates or times by which those improvements will be implemented (which must not be later than 31 December 2009).

(1) Subclause (2) applies if—

• (a) a relevant wholesale service becomes regulated after the commencement of this determination; and

• (b) the Commission recommends to the Minister that a different standard of equivalence should apply and states what that standard of equivalence should be; and

• (c) the Minister consults with Telecom about the Commission's recommendation; and

• (d) the Minister accepts the Commission's recommendation.

(2) The separation undertakings must provide that—

• (a) the standard of equivalence recommended by the Commission applies to that service; and

• (b) Telecom must make the recommendation and information about its effect available to the public at all reasonable times on Telecom's Internet website.

(1) The separation undertakings must provide that the wholesale unit must build all relevant wholesale services and associated systems that are not regulated at the commencement of this determination in such a manner as to ensure that access seekers can purchase those services from the wholesale unit on an equivalence of inputs basis in the event that the services become regulated.

(2) The separation undertakings may include reasonable limitations on the application of subclause (1) to any identified relevant wholesale service that is not regulated at the commencement of this determination if—

• (a) it is reasonably expected that Telecom itself will not meaningfully use the service; and

• (b) the reasons for that expectation are set out in the undertakings.

(3) If subclause (2) applies, the separation undertakings must require Telecom to build the service ready for a suitable alternative standard of equivalence specified in the undertakings.

(4) Without limiting subclause (2), the separation undertakings under subclause (1) may apply except to the extent to which the Commission agrees to minor exceptions.

(5) This clause does not limit clauses 51, 54, and 56.

The separation undertakings must provide that, if the wholesale unit chooses to supply a service provider (other than Telecom) with a relevant service that it is not required to provide under Part 2 of the Act, a Telecom registered undertaking, or any other law, then the wholesale unit must supply that service to the other service provider on commercial terms in accordance with the non-discrimination rule in clause 61.

(1) The separation undertakings must provide that Telecom must operate the wholesale unit at arm's-length from any business unit that provides retail functions.

(2) This includes having relationships, dealings, and transactions that do not include elements that parties in their respective positions would usually omit, and that do not omit elements that parties in their respective positions would usually include, if—

• (a) the parties were acting independently; and

• (b) the parties were acting at arm's-length.

(3) Arm's-length also includes compliance with the other arm's­length rules.

(4) This clause does not limit the ordinary meaning of the expression arm's-length.

(5) The separation undertakings may include reasonable limitations on the application of the arm's-length rules to a relevant wholesale service that is not regulated if—

• (a) the relevant wholesale service, the extent of any limitations, and the reasons for the limitations, are specified in the undertakings; and

• (b) the limitations apply to the extent and for the period reasonably justified for the purpose of facilitating appropriate non-discriminatory contact between the wholesale unit and the retail unit in order to avoid unreasonable constraints on new product and service development.

(6) To avoid doubt, this clause does not limit section 69D of the Act (which requires, among other things, that Telecom operate its wholesale units and its retail units at arm's-length).

The separation undertakings may include reasonable relaxations of the application of the arm's-length rules to the wholesale unit and the retail unit, but to the extent only that those relaxations are necessary operationally to allow the wholesale unit and the retail unit to interact or exchange information in order for the wholesale unit to fulfil its obligations in respect of resale services.

(1) The separation undertakings must provide that Telecom must appoint a person to have responsibility for the management of the wholesale unit.

(2) Telecom has discretion to determine the title of the position of that person.

(3) The separation undertakings must provide that the person must—

• (a) not have any responsibility for the ANS unit or a retail unit:

• (b) manage the wholesale unit in a way designed to secure compliance with the provisions of the separation undertakings that apply to the unit:

• (c) report directly to the chief executive of TCNZ.

The separation undertakings must provide that no person who is an employee working for the wholesale unit may work for the retail unit.

The separation undertakings must provide that the wholesale unit must formulate its own commercial policies.

(1) The separation undertakings must provide that the wholesale unit and all its employees, agents, and contractors must, when doing or omitting to do anything in relation to the supply of relevant wholesale services to persons who have or seek access to relevant services (whether other Telecom units or other service providers), act in a way that does not discriminate between those persons.

(2) This clause is subject to clause 8.

(1) The separation undertakings must provide that all transactions between the wholesale unit and the retail unit for the provision by the wholesale unit of relevant wholesale services must be in writing and include all the terms of the transaction, including price or appropriate transfer charges.

(2) The separation undertakings must provide that the wholesale unit must give a copy of the transaction documents to the IOG as soon as practicable after the transaction is entered into.

(1) The separation undertakings must provide that the wholesale unit and all its employees, agents, and contractors must not disclose customer confidential information to any other Telecom business unit, unless the service provider to which the information relates consents.

(2) However, the separation undertakings may permit any disclosure that—

• (a) is necessary operationally to enable the wholesale unit to provide a relevant service in accordance with its obligations under the separation undertakings; or

• (b) is made in order to transfer an order for a relevant service from the wholesale unit to the ANS unit (or vice versa) in accordance with arrangements made to comply with clause 94.

(1) The separation undertakings must provide that the wholesale unit and all its employees, agents, and contractors must not disclose wholesale unit commercial information to any other Telecom business unit, unless that information is also available to all other service providers on an equal basis.

(2) However, the separation undertakings may permit any disclosure that—

• (a) is necessary operationally to enable the wholesale unit to provide a relevant service in accordance with its obligations under the separation undertakings; or

• (b) is made in order to transfer an order for a relevant service from the wholesale unit to the ANS unit (or vice versa) in accordance with arrangements made to comply with clause 94.

(1) The separation undertakings must provide that all incentive remuneration for employees working for the wholesale unit must reflect solely the objectives and performance of the wholesale unit and, if Telecom wishes, any other Telecom business unit (other than the ANS unit) that manages the supply of wholesale services to persons who have or seek access to relevant services (whether other Telecom business units or other service providers).

(2) The separation undertakings must provide that remuneration for employees working for the wholesale unit must not comprise any incentives that are directly or indirectly linked to Telecom's overall performance.

(2A) However, the separation undertakings may provide that,—

• (a) for the manager of the wholesale unit, incentive remuneration that reflects the objectives and performance of Telecom as a group may comprise up to 80% of the manager's total incentive remuneration; and

• (b) for an employee who reports directly to the manager of the wholesale unit (other than an employee who is responsible for relevant wholesale services only), incentive remuneration that reflects the objectives and performance of Telecom as a group may comprise up to 20% of the employee's total incentive remuneration.

(3) Furthermore, the separation undertakings may permit Telecom shares to comprise part of long-term incentive and remuneration schemes, but not short-term incentive schemes (such as annual bonuses), for employees working for the wholesale unit, provided that the separation undertakings—

• (a) attach a document that describes the extent to which those schemes comprise Telecom shares; and

• (b) prohibit any increase in the extent to which the schemes comprise Telecom shares, if the increase would result in the schemes for employees working for the wholesale unit comprising a higher proportion of Telecom shares than the schemes for employees working for the retail unit; and

• (c) require Telecom to notify to the IOG and the Commission any changes in the extent to which the schemes for employees working for the wholesale unit comprise Telecom shares.

(1) The separation undertakings must provide that all employees working for the wholesale unit must be located in access-controlled accommodation that is separately secured from the retail unit.

(2) However, the separation undertakings may provide that this clause does not apply to an employee if—

• (a) the employee works in a place where Telecom does not have a significant number of employees; and

• (b) the Commission has agreed, on application by Telecom, that—

  • (i) it would be impractical or unreasonably expensive to comply with the requirement in this clause in relation to that employee; and

  • (ii) appropriate alternative procedures are in place in relation to the employee in order to ensure compliance with the arm's-length rules.

(1) The separation undertakings must ensure that the persons referred to in subclause (2) must be either—

• (a) employees of Telecom who work solely for the wholesale unit; or

• (b) employees who work solely for the wholesale unit and any other Telecom business unit (other than the ANS unit) that manages the supply of wholesale services to service providers.

(2) The persons are—

• (a) all employees who are directly involved in the management of the planning, design, implementation, and in-life service management of relevant wholesale services and ancillary activities; and

• (b) all employees who are directly involved in providing a wholesale sales function in relation to relevant wholesale services; and

• (c) the managers of the employees referred to in paragraphs (a) and (b), up to and including the manager of the wholesale unit.

(1) The separation undertakings must ensure that all employees who are directly involved in providing legal or regulatory advice to the wholesale unit are as follows:

• (a) employees of Telecom who work solely for the wholesale unit; or

• (b) employees of Telecom who work solely for the wholesale unit and any other Telecom business unit (other than the ANS unit) that manages the supply of wholesale services to service providers; or

• (c) employees of Telecom who work solely for Group Legal Services or Group Regulatory.

(2) The separation undertakings must provide that Group Legal Services and Group Regulatory must operate as follows to the extent that subclause (1)(c) applies:

• (a) all employees who are directly involved in providing legal or regulatory advice to the wholesale unit must be primarily accountable to the manager of the wholesale unit for the advice that they provide to the wholesale unit; and

• (b) strict Chinese walls must be maintained between all employees who are directly involved in providing legal or regulatory advice to the wholesale unit and any employees who provide advice to the retail unit, including a rule that legal and regulatory staff that advise one of those units on an issue cannot also advise the other unit on that issue or any related issue.

(1) The separation undertakings must ensure that Telecom maintains and updates DSPL and RSPL in accordance with the terms of the Commission's wholesale determinations as if all of the Commission's wholesale determinations were still in force but subject to any amendments agreed between the parties to those determinations.

(2) This requirement includes an obligation on Telecom to have the DSPL and RSPL audited.

(3) To avoid doubt, this clause only requires the DSPL and RSPL to be maintained for the purposes of the separation undertakings and does not have the effect of bringing back into force any Commission wholesale determination that has expired.

(1) This Part sets further requirements about the 1 or more business units referred to in section 69D(1)(a)(iii) of the Act that must provide 1 or more other functions.

(2) The requirements in this Part only apply to a unit or units that provide a retail function, which are together called the retail unit in this determination.

The separation undertakings need not provide that the retail unit must control any specific assets.

The separation undertakings need not provide that the retail unit must provide any specific services.

(1) The separation undertakings must provide that Telecom must operate the retail unit at arm's-length from any of Telecom's fixed network business units (whether access service units or other fixed network units).

(2) This includes having relationships, dealings, and transactions that do not include elements that parties in their respective positions would usually omit, and that do not omit elements that parties in their respective positions would usually include, if—

• (a) the parties were acting independently; and

• (b) the parties were acting at arm's-length.

(3) Arm's-length also includes compliance with the other arm's­length rules.

(4) This clause does not limit the ordinary meaning of the expression arm's-length.

The separation undertakings must provide that no person who is an employee working for the retail unit may work for the ANS unit, the wholesale unit, or any Telecom fixed network business unit.

The separation undertakings must provide that the retail unit and all its employees, agents, and contractors must not influence or attempt to influence the commercial policy of any of Telecom's fixed network business units, except through mechanisms and processes that are also available to all other service providers on an equal basis.

(1) The separation undertakings need not provide that the retail unit must employ any particular Telecom employees.

(2) However, this clause does not limit clauses 73 to 75.

The separation undertakings must provide that no person who is an employee working for any Telecom fixed network business unit may work for the retail unit.

The separation undertakings must provide that every Telecom fixed network business unit and all its employees, agents, and contractors must not disclose customer confidential information to the retail unit unless the service provider to which the information relates consents.

However, the separation undertakings may provide that a Telecom fixed network business unit may disclose customer confidential information to the retail unit if—

• (a) the disclosure is necessary operationally to enable the Telecom fixed network business unit to participate in providing a relevant service in accordance with the separation undertakings; and

• (b) the separation undertakings impose an obligation of confidence on the recipient of the information.

The separation undertakings must provide that every Telecom fixed network business unit and all its employees, agents, and contractors must not disclose Telecom fixed network business unit commercial information to the retail unit unless that information is also available to all other service providers on an equal basis.

However, the separation undertakings may provide that a Telecom fixed network business unit may disclose Telecom fixed network business unit commercial information to the retail unit—

• (a) if the information relates to a relevant service that Telecom is not required to provide service providers with and that Telecom is not supplying to a service provider; or

• (b) if—

  • (i) the disclosure is necessary operationally to enable the Telecom fixed network business unit to participate in providing a relevant service in accordance with the separation undertakings; and

  • (ii) the separation undertakings impose an obligation of confidence on the recipient of the information.

The separation undertakings must require Telecom to establish an Independent Oversight Group (IOG).

(1) The separation undertakings must provide—

• (a) that the TCNZ board must appoint 5 members of the IOG, of whom the majority must be independent of Telecom; and

• (b) that the TCNZ board must appoint a member of the IOG who is independent of Telecom as chairperson of the IOG; and

• (c) that the TCNZ board must not appoint a member of the IOG who is employed within the ANS unit, the wholesale unit, or the retail unit; and

• (d) that Telecom must consult with the Commission over the appropriate skills mix for the IOG, and before appointing the chairperson and the other independent members; and

• (e) that the criteria for independent members must include that the members have no material conflict of interest; and

• (f) that the TCNZ board may remove members of the IOG only after consultation with the Commission.

(2) The separation undertakings must provide that, in determining whether a conflict exists for the purpose of subclause (1)(e), regard must be had to whether the person is—

• (a) an employee or former employee of Telecom:

• (b) a director or senior executive of another telecommunications provider:

• (c) a partner or senior executive of any firm, company, or other organisation providing services to Telecom or any other telecommunications provider:

• (d) an employee of the Commission:

• (e) a material shareholder in Telecom or in any other telecommunications provider.

The separation undertakings must provide that Telecom must set terms of reference for the IOG that provide for the IOG to have the functions contemplated for it in this determination, including, without limitation, the following functions:

• (a) those in clause 87 in respect of key performance indicators and codes of conduct for Telecom personnel:

• (b) recommending those indicators and codes to the TCNZ board, if the final product of the consultation process under that clause is satisfactory to the IOG:

• (c) reviewing performance against those indicators and codes, and recommending changes to those indicators and codes:

• (d) processing complaints about compliance with the separation undertakings:

• (e) requesting information, and carrying out any investigations, to assess compliance with the separation undertakings:

• (f) requesting the support office to carry out any investigations to assess compliance with the separation undertakings:

• (g) reviewing reports prepared by the support office:

• (h) being kept informed of service-level agreements set by Telecom and reviewing Telecom's performance against those agreements:

• (i) reviewing the supply of services internally to Telecom in accordance with the separation undertakings:

• (j) reviewing the process of making, considering, advising, and implementing decisions under clause 45 and reviewing whether requests have been dealt with in accordance with that process:

• (k) reviewing any documentation that this determination requires to be supplied to the IOG and investigating whether that documentation shows that there has been a breach of the separation undertakings:

• (l) reporting to the TCNZ board as soon as is reasonably practicable after the IOG becomes aware of any of Telecom actions or omissions that, in the IOG's opinion, may become issues of concern in terms of compliance with the separation undertakings:

• (m) reporting to the TCNZ board and the Commission—

  • (i) as soon as is reasonably practicable after the IOG becomes aware of any non-trivial breach of the separation undertakings or Part 2A of the Act; and

  • (ii) on a regular basis, at times agreed with Telecom, on Telecom's compliance with the separation undertakings; and

  • (iii) annually, in an annual review of Telecom's compliance with the separation undertakings:

• (n) making, subject to clause 89, each of its annual reports, and any other report or document that the IOG chooses to publish, available on an Internet website that is available to the public at all reasonable times:

• (o) every other function contemplated for the IOG in this determination.

The separation undertakings must provide that Telecom will—

• (a) fully fund the IOG in its performance of the functions in clause 82; and

• (b) pay each member who is appointed under clause 81 to a paid position; and

• (c) reimburse each member appointed under clause 81 for actual and reasonable travelling and other expenses incurred in carrying out his or her office as a member; and

• (d) organise and pay for professional indemnity insurance for each member appointed under clause 81, if requested by the member; and

• (e) prepare any reports that the IOG may reasonably require in relation to Telecom's compliance with the separation undertakings; and

• (f) ensure that the IOG has access to the Telecom staff and information that the IOG may reasonably request; and

• (g) ensure, subject to clause 89, that every report prepared by Telecom or by the IOG under the separation undertakings is made available to the public at all reasonable times on Telecom's Internet website if the report relates to—

  • (i) a breach of the separation undertakings under clause 82(m)(i); or

  • (ii) codes of practice for Telecom personnel in relation to the separation undertakings; or

  • (iii) key performance indicators that relate to the separation undertakings; and

• (h) use its best endeavours to provide whatever other assistance the IOG may reasonably require in the performance of its functions.

The separation undertakings must ensure that Telecom must establish a support office that will assist the IOG in the performance of its functions (support office).

The separation undertakings must provide that Telecom must employ sufficient staff for the support office, and provide other resources as necessary, to—

• (a) enable the support office to operate at a level that meets the reasonable requirements of the IOG; and

• (b) ensure that the support office is able to operate with a sufficient level of independence from Telecom.

The separation undertakings must provide that Telecom must fully fund the support office and use its best endeavours to provide whatever assistance the support office may reasonably require in the performance of its functions.

(1) The separation undertakings must provide that Telecom must, in consultation with the IOG,—

• (a) prepare key performance indicators related to compliance with the separation undertakings and progress towards compliance, and Telecom must have those indicators considered by the IOG:

• (b) prepare codes of conduct for Telecom personnel (including contractors) and have those codes considered by the IOG.

(2) The separation undertakings must provide that Telecom must—

• (a) provide additional information to the IOG and the Commission to demonstrate compliance with the separation undertakings, as reasonably requested by the IOG or the Commission, including preparing reports or other information related to compliance that are reasonably requested by the IOG or the Commission:

• (b) use its best endeavours to assist the IOG in conducting an annual review of Telecom's compliance with the separation undertakings.

(3) The separation undertakings must provide that information referred to in subclause (2)(a) must be provided—

• (a) in the manner and form required by the IOG and the Commission; and

• (b) within the time frame that is specified by the IOG and the Commission.

(4) This clause does not limit the Commission's responsibilities under the Act.

The separation undertakings must provide that—

• (a) Telecom must appoint, and pay for, an independent external audit of the IOG's annual report; and

• (b) the appointment of the auditor and the terms of appointment for the auditor must be approved by the Commission, and the terms of appointment must place the auditor under a duty of care to the Commission; and

• (c) Telecom must, subject to clause 89, make each report of the auditor available on an Internet website that is available to the public at all reasonable times.

The separation undertakings must ensure that Telecom or the IOG may remove from any report that is made available to the public under clause 83(g) or 88(c) or 82(n) any information that the IOG has agreed is confidential or commercially sensitive information that can be removed, provided that a full version of the report, including that information, is provided to the IOG, the Commission, and the Minister.

(1) The separation undertakings must set rules about how the persons referred to in Part 2 of Schedule 2 (the corporate centre) may participate in policy relating to any required Telecom business unit, provided those rules meet the following requirements:

• (a) the corporate centre may participate in the policy of the ANS unit only by asking the TCNZ board or the chief executive of TCNZ to act in accordance with clause 15(3); and

• (b) the corporate centre may participate in the policy of the wholesale unit only as follows:

  • (i) by giving information (including advice but not instruction) to the wholesale unit; or

  • (ii) by asking the TCNZ board or the chief executive of TCNZ to act in accordance with clause 15(3); and

• (c) the participation of the member of the corporate centre must be no more than is reasonable and necessary to enable that member to perform their role (as that role is specified in the separation undertakings); and

• (d) the participation must be transparent to the IOG either as—

  • (i) a direction under clause 15(3) and transparency under clause 15(3) and (5); or

  • (ii) information (including advice) that is recorded in writing and that is made available to the IOG if the IOG requests it; and

• (e) the participation may also be made through mechanisms and processes that are also available to all other service providers on an equal basis.

(2) To avoid doubt, the corporate centre may not give direct advice or instruction to the ANS unit, but the ANS unit may seek information from the corporate centre to help it make its own decisions.

(3) In this clause, participate in policy means to participate in the formulation or making of—

• (a) annual or long-term corporate plans or technology plans; or

• (b) other plans; or

• (c) commercial policy.

(1) The separation undertakings must set rules about how the persons referred to in Parts 2 and 3 of Schedule 2 may receive commercial information, provided those rules meet the following requirements and the requirements in subclause (3):

• (a) the ANS unit and the wholesale unit may disclose summaries of commercial information to any of those persons (including, without limitation, any member of the Executive Committee) provided that—

  • (i) the summary contains no more information than is reasonable and necessary to enable the person to perform their role (as that role is specified in the separation undertakings); and

  • (ii) the summary is in a form that could not reasonably be expected to identify any customers of Telecom or other service providers; and

• (b) any required Telecom business unit may disclose commercial information to any of those persons (other than members of the Executive Committee whom Part 2 of Schedule 2 does not permit to receive that unit's commercial information) provided that—

  • (i) the person has a legitimate need for the information; and

  • (ii) the disclosure is no more than is reasonable and necessary to enable that person to perform their role (as that role is specified in the separation undertakings).

(2) The separation undertakings must set rules about how the persons referred to in Part 4 of Schedule 2 may receive customer confidential information, provided those rules meet the following requirements and the requirements in subclause (3):

• (a) the ANS unit and the wholesale unit may disclose summaries of customer confidential information to any of those persons (including, without limitation, any member of the Executive Committee) provided that—

  • (i) the summary contains no more information than is reasonable and necessary to enable that member to perform their role (as that role is specified in the separation undertakings); and

  • (ii) the summary is in a form that could not reasonably be expected to identify any customer of Telecom; and

• (b) any required Telecom business unit may disclose customer confidential information to any of those persons (other than members of the Executive Committee whom Part 4 of Schedule 2 does not permit to receive that unit's customer confidential information) provided that—

  • (i) the person has a legitimate need for the information; and

  • (ii) the disclosure is no more than is reasonable and necessary to enable that person to perform their role (as that role is specified in the separation undertakings).

(3) The rules under subclauses (1) and (2) must also provide that—

• (a) the person to whom any information is disclosed must be required to maintain, and aid in maintaining, the confidentiality of the information, and not to disclose the information except as permitted under the clauses that limit the disclosure of information or under this clause; and

• (b) the disclosure may also be made if the information is also available to all other service providers on an equal basis.

(1) The separation undertakings must contain a fuller description of the roles of the groups and persons referred to in Schedule 2.

(2) The separation undertakings may provide that Telecom and the Commission may, by agreement, amend—

• (a) the contents of the lists of the groups and persons referred to in Schedule 2; and

• (b) the description of the roles of any of those groups or persons.

(3) The separation undertakings must require Telecom, if amendments are made under subclause (2), to make the information as amended available on an Internet website that is available to the public at all reasonable times.

The managers of each of the persons referred to in Schedule 2 (excluding the TCNZ board and the chief executive of TCNZ) must certify to the TCNZ board annually that, to the best of their knowledge after making reasonable inquiry, they and the employees working for their groups have complied with the separation undertakings (except for any breaches that have been reported to the IOG and the Commission).

(1) The separation undertakings must require Telecom to consult with each access seeker about whether each access seeker would prefer to deal only with the ANS unit or the wholesale unit in relation to all of the relevant services that the access seeker purchases from Telecom and, if so, which unit.

(2) The separation undertakings must require Telecom, if a significant number of access seekers do so prefer, to implement arrangements so that—

• (a) the ANS unit or the wholesale unit, as the case may be, can sell relevant services to access seekers on behalf of the other unit; and

• (b) an access seeker can choose to deal with only one unit for purchases of all relevant services; and

• (c) if an access seeker chooses to deal with only one unit, the access seeker experiences no disadvantage in terms of price, service, or quality as a result of that choice.

(1) The separation undertakings may contain a force majeure provision.

(2) If so, the provision must—

• (a) describe the types of circumstances beyond Telecom's reasonable control that will constitute a force majeure event; and

• (b) relieve Telecom of an obligation or obligations under the undertakings only to the extent that, and for so long as, Telecom is unable to perform the obligation as a result of the force majeure event; and

• (c) require Telecom to notify the IOG and the Commission as soon as reasonably practicable after the force majeure event occurs.

The separation undertakings must provide that TCNZ and its subsidiaries must—

• (a) establish arrangements to ensure that each of those companies, and all of their officers, employees, agents, and contractors, comply with the separation undertakings, and with any documents or procedures that are required by, or necessary to give effect to, the separation undertakings; and

• (b) provide evidence to the IOG of the steps that they have taken to comply with paragraph (a).

The separation undertakings may preserve Telecom's ability to contract with any other person for that other person to operate any of Telecom's assets or to perform any of Telecom's functions or to carry out any activities that would otherwise be carried out by Telecom, provided that—

• (a) the separation undertakings must ensure that the terms of the outsourcing subject the other person to the same obligations as would be imposed on an employee working for the business unit whose business is being outsourced; and

• (b) Telecom retains the ability to ensure that the way in which those assets are operated, functions are performed, or activities are carried out will not undermine a robust operational separation of Telecom.

To avoid doubt, any required Telecom business unit may share assets and systems with any other Telecom business unit, provided that the terms on which those assets or systems are shared comply with the requirements of this determination and section 69D of the Act.

The separation undertakings must ensure that, if Telecom decides that shared services are to carry out any work for a required Telecom business unit, Telecom must have arrangements in place to ensure that the terms on which shared services are used complies with the requirements of this determination and section 69D of the Act.

The separation undertakings may provide exceptions to the application of the arm's-length rules to access planners (being employees of the ANS unit who work for that unit and perform access planner functions) provided that—

• (a) the separation undertakings set out the role of access planners; and

• (b) the reasons for the exceptions are explained in the separation undertakings; and

• (c) the exceptions are not more than is necessary to enable access planners to perform their role.

The separation undertakings must require Telecom to ensure that its selection and appointment of advisers does not undermine a robust operational separation of Telecom.

The provisions of this determination about the disclosure of customer confidential information do not limit any additional confidentiality obligations that Telecom has under existing laws or commercial agreements.

(1) The separation undertakings must require the TCNZ board to certify annually (by all directors signing on behalf of the company) that, to the best of their knowledge after making reasonable inquiry, TCNZ and all its subsidiaries have complied with the separation undertakings (except for any breaches that have been reported to the IOG and the Commission).

(2) The separation undertakings must require Telecom to ensure that the following people certify annually to the TCNZ board that, to the best of their knowledge after making reasonable inquiry, they have complied with the separation undertakings (except for any breaches that have been reported to the IOG and the Commission):

• (a) the chief executive of TCNZ:

• (b) the managers of the ANS unit, the wholesale unit, the retail unit, and any Telecom fixed network unit.

The separation undertakings must require Telecom to establish a system—

• (a) to facilitate the disclosure and investigation of breaches of the separation undertakings in or by Telecom; and

• (b) to enable Telecom employees to report matters to the IOG, and to protect employees who do so.

(1) The separation undertakings must provide for the preparation of a statement of the assets controlled by the ANS unit as at 1 July 2008.

(2) The statement must—

• (a) be prepared in accordance with generally accepted accounting practice; and

• (b) be prepared in accordance with the same accounting policies as the accounts of TCNZ; and

• (c) reconcile with the accounts of TCNZ.

(3) Telecom must appoint, and pay for, an independent external audit of the statement of assets.

(4) No later than 1 October 2008, Telecom must provide to the IOG, the Commission, and the Minister—

• (a) copies of the statement of assets and the independent external auditor's report; and

• (b) full information setting out the methodologies used to prepare the statement of assets, which must include descriptions of any models used, and all assumptions and estimates that are necessary to provide assurance as to the robustness of the calculations made in preparing the statement, including identifying the owner of the assets.

(5) To avoid doubt, nothing in this clause affects Part 2B of the Act (which contains information disclosure requirements).

(1) This clause applies during the period beginning on the separation day and ending with 31 December 2008.

(2) The separation undertakings may provide that Telecom has a reasonable time, after being notified of any failure to comply with any of the arm's-length rules, to comply provided that—

• (a) Telecom must have agreed with the Commission what a reasonable time would be in the circumstances of the case; and

• (b) Telecom must take all reasonable steps during that period to try to achieve compliance; and

• (c) the failure to comply was inadvertent.

The separation undertakings may provide that a failure to comply with the separation undertakings is not a breach of the undertakings if the failure is trivial or de minimis.