The days of internet dial-up services could be numbered, under proposed changes to the Telecommunications Service Obligations (TSO) document.

After releasing a discussion document on possible changes yesterday, the government believes the TSO is now dated, "with a number of limitations that are likely to become more problematic over time."

One is the use of internet dial-up services, with the document stating consumers who currently use dial-up internet would need to replace their existing equipment (such as modems) with new equipment which can provide similar services over data networks, as Telecom progressively moves away from PSTN technology.

"Replacement of equipment is happening anyway, particularly with the uptake of broadband and the use of the internet to email documents," the document states.

"However, at minimum, a transition period and information provision would be required for dial-up users, similar to that provided for the current switch-over to digital television."

The paper claims any new requirements for the TSO would need to be negotiated with Telecom and Chorus however, and may involve costs, or may need to be imposed by legislation.

"The current TSO, by requiring Telecom to continue to make access available for dial-up internet and fax services, effectively locks Telecom into continuing to use older “legacy” technology that will be replaced over time," the paper says.

"This older technology is the copper-based PSTN (or Public Switched Telephone Network), which is being superseded by data networks, particularly with the roll-out of fibre to replace traditional copper lines and the development of wireless and mobile radio technologies.

"That means the current TSO does not allow Telecom to use the most cost-effective and modern technology to provide TSO services, potentially delaying availability of cheaper and more innovative services."

According to the paper, 114,000 homes are still using dial-up internet for both web and email access, but the government predicts this will drop to 41,00 within the next two years.

In reviewing the future of the TSO, which applies to Telecom and Chorus, the government aims to ensure that local residential telephone services are widely available throughout New Zealand and remain affordable.

The Ministry of Business, Innovation and Employment (the Ministry) is required to report to the Minister for Communications and Information Technology by the end of 2013 on the future of the TSO.

The Ministry has identified three main options for updating the TSO. They are:

• A minimum change option

• A medium change option

• A contestable TSO option

The Ministry is currently seeking comments on the document to assist it to provide advice to the Minister.

To read the full discussion document click here