Government sets out its preferred post-2020 telecoms regime

Communications Minister Simon Bridges has released a consultation paper setting out details of how the government proposes to regulate access to the copper telephone network beyond 2020.

In areas where UFB or other fibre is available, the Government is proposing to deregulate the copper network from 2020 and remove the TSO obligation. In areas where UFB or other fibre is not available, the TSO obligation will be retained and Chorus will be required to continue supplying copper services at prices capped at 2019 levels.

The Government says this regime will ensure consumers continue to have access to basic services at competitive prices, even when alternative networks are not available.

The proposal was tentatively welcomed by InternetNZ. CEO Jordan Carter said he thought it would deliver the fair broadband prices Kiwis deserve.

However, he added: “We will apply a magnifying glass to the details to make sure that fair prices for broadband are a reality after 2020. We’ll give feedback to the Government with that goal in mind Today’s announcement shows that things are on the right track, but there’s still some important points of detail to iron out.

Carter said InternetNZ would spend the next few days digesting the details and speaking with the sector, before responding to the options paper.

TUANZ also welcomed the new proposals, and claimed some of the credit for their introduction. CEO, Craig Young, said: “It’s encouraging that many of the options outlined in the paper reflect our submissions and align with our objectives of ensuring New Zealanders can access competitively priced, high quality connectivity.

He added: “It’s critical in this very technical review of regulation of telecommunication services that the voice of the user is heard because we are the ultimate consumer of the products, which are now critical to our businesses and our everyday lives.”

He said there were a number of aspects of the proposed new regime that required further work, including the proposal to deregulate copper pricing within the UFB footprint.

“Having worked so hard as an organisation to advocate for regulation to be applied to the copper access network to ensure competition and fairer outcomes for users, it's critical that we take time to ensure that the removal of this regulation will not be a backwards step for New Zealanders.” Young said.

The consultation paper follows release of the July 2016 options paper which set out the details of the new ‘utility-style’ regime for fixed line communications services provided on the Ultra-Fast Broadband (UFB) network and Chorus’ copper network.

In that paper the Government proposed using a ‘building blocks’ pricing model, saying this would benefit end-users through a competitive retail market; prevent monopoly profits and incentivise ongoing efficient investment in high quality networks.

However Bridges said the approach set out the new consultation paper differed from that favoured in the options paper as a result of feedback from industry and consumer groups about how the proposed regime would work in practice.

“Following further consideration and analysis we have decided to take a different approach to the regulation of copper services, and focus the new regulations primarily on New Zealand’s fibre network,” Bridges said.

“We’re seeking feedback on this proposal and on changes to the Telecommunications Service Obligation (TSO) through the consultation document released today.” Submissions on the consultation paper close on 3 March 2017.

Copyright © 2017 IDG Communications, Inc.

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