Govt to review telco regulation

“I have decided to bring forward the wider regulatory framework review as regulatory certainly is an important factor in the ability of New Zealanders to have early access to high-quality communication services based on new technologies,” Adams says.

“The policy framework needs to be predictable and stable for all concerned, and in my view, it is therefore desirable that these two reviews get underway immediately,”

Adams says the Commerce Commission’s draft Unbundled Bitstream Access decision, which regulates the price Chorus charges for access to its copper network, “has highlighted market uncertainty”.

The UBA decision is currently going through the submission process, with a final decision to have effect from December 1 2014. However, because of the review, this could be delayed.

“Given the start of these reviews, both the implementation date for the cost-based UBA price set by the Commerce Commission and the deadline for the Commission to complete the UBA review is to be extended to a date no later than November 30 2015, to allow time to give effect to any changes recommended by the regulatory review. This is to be implemented through legislative change to be made by the end of 2013.”

In her statement Adams highlights the migration from copper to fibre connectivity.

Chorus claims that if copper pricing is lowered, consumers won’t have an incentive to shift to government-backed fibre rollouts the Ultra Fast Broadband and Rural Broadband Initiative.

At a TUANZ After 5s event yesterday evening Telecom CEO Simon Moutter said the Commission’s draft UBA pricing – a 58 percent reduction on current pricing – was in line with its brief, which was to determine how much it costs to provide the service. Telecom has around 50 percent fixed line broadband market share in New Zealand.

“It’s obvious that the ComCom’s done this, the UBA pricing, on what does it cost to add the electronics, the DSLAMs etc and it’s broadly right. I know that because I have other DSLAM owners offering us an equivalent service,” he says.

“Unless there is a strong reason to be other than that, then that’s the right price. There made be [other reasons], but someone has to make the case for over recovery.”

Moutter said yesterday the Commission has done its job and it’s up to policy makers to open a discussion as to whether the new regulated UBA pricing should be different to a cost-based calculation.

Adams has done exactly that this morning with the announcement of a wide ranging review into telco regulation.