ComCom outlines its views on the future of fibre regulation

ComCom outlines its views on the future of fibre regulation

As UFB roll-out reaches its conclusion, a new set of rules is being drafted

Dr Stephen Gale (Telecommunications Commissioner)

Dr Stephen Gale (Telecommunications Commissioner)

The Commerce Commission today released its views on the rules, requirements and processes for a new regulatory regime for fibre networks.

Among other measures, it is proposing initially that Chorus will be subject to both price-quality and information disclosure regulation while the other local fibre companies (Enable Networks, Northpower and Ultrafast Fibre) will be subject to information disclosure only. 

Price-quality regulation can be imposed on them after the implementation date if necessary.

With the government’s ultra-fast broadband roll-out scheduled to be completed by the end of 2022, a new regulatory regime is required.

Parliament passed amendments to the Telecommunications Act last year tasking the Commission with creating a utility style regime for fibre networks that, among other objectives, includes preventing Chorus and the other local fibre companies from earning excessive profits.

The regulatory framework, therefore, will see Chorus subject to revenue caps and minimum quality standards.

“The rules we are developing that underpin the revenue caps for Chorus will have an impact on the price consumers end up paying for broadband," telecommunications commissioner Dr Stephen Gale said.

"We are keen to hear from consumer advocates on our current thinking around how we treat key issues such as the cost of capital and what is included in Chorus’ regulated asset base."

The paper says suppliers subject to price-quality regulation must provide anchor services expected to be 100/20Mbps broadband, and voice and DFAS.

The maximum prices charged for these services until the end of the initial regulatory period will be the contract prices immediately before implementation date plus an annual CPI adjustment.

Perhaps contentiously for retailers, an unbundled fibre service is to be provided in accordance with the open access deeds with no price cap initially.

ComCom is also looking at which dimensions of quality matter to New Zealanders, and how they will flow through to the final quality standards required of Chorus.

"The quality dimensions are based on the stages of the fibre service life-cycle and include customer service, service availability and performance among others," Gale explained.

Chorus and the local fibre companies will also be required to publicly disclose information about their performance in what is colloquially known as sunlight regulation.

Gale said the emerging views paper was an opportunity to test the Commission’s thinking on different topics before it made its draft decisions.

“We want to make sure we design a robust and enduring regulatory framework for fibre networks that have become an important part of New Zealanders’ daily lives," he said. 

"Consumers and businesses increasingly demand ubiquitous, high speed connections to support an ever-expanding range of activities, so it’s important we get it right.”

A final set of rules is expected in June 2020.

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Tags broadbandTelecommunicationsComComUFBChorusUltrafast FibreCommerce Commissionenable networksTelecommunications Commissionernorthpower

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