Commerce Commission deregulates Spark voice resale services

The Commerce Commission has confirmed its draft decision, issued in May, that Spark’s resale copper voice services should be deregulated, bringing to a close a tortuous process spanning several years.

Spark welcomed the decision saying it had provided these services under commercial terms for well over ten years, but “removal of regulation is a positive signal that the regulatory regime can adapt to reflect changing competitive dynamics.”

Spark said it was already well underway in its transition from its legacy public switched telephone network to a future-ready IP-based voice network dubbed the ‘Converged Communications Network’ (CCN). The plan was announced in April 2017.

“The commission’s final decision today provides further support to, but will not affect the pace of that transition,” it said.

The commission released a draft report in 2016 recommending the services be deregulated, but when it released its final report in December 2016, it had changed its mind, saying there was likely to be little or no benefit from deregulating the services and “any benefit is likely to be outweighed by the potential costs associated with any exercise of market power by Spark especially while RSPs are migrating customers to alternatives including fibre.”

It said, subject to ministerial approval, it would revisit the issue in two years and issued a new draft decision in April 2019 recommending deregulation.

The commission received only two submissions to that draft, one from Spark and one from Chorus, both supporting deregulation.

However the Chorus submission also called for removal of its obligation to provide the bundle of unbundled bitstream access with Spark’s local access and calling service, saying: “In our view it makes little sense to require Chorus to resell the service if the commission has found that the service is no longer required to promote competition.”

The commission concluded that this requirement would become redundant and cease to have effect, as there would no longer be a designated access service in Schedule 1 of the Act comprising a local access and calling service, and suggested the redundant text could be removed from the Telecommunications Act at some future date.

Copyright © 2019 IDG Communications, Inc.

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