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What the future of fibre looks like in NZ

21 May 2019

The Commerce Commission has released its emerging views paper on the rules, requirements and processes which will underpin the new regulatory regime for New Zealand’s fibre networks.

New Zealand is now transitioning from the old copper telecommunications network to faster and more reliable fibre networks. This is largely due to the Government’s ultra-fast broadband rollout, which is scheduled to be completed by the end of 2022.

In preparation for this, Parliament passed legislation tasking the Commission with creating a utility style regulatory regime for fibre networks that promotes the outcomes of competitive markets including preventing Chorus and the other local fibre companies (Northpower Fibre, Ultrafast Fibre and Enable Networks) from earning excessive profits at the expense of network quality and consumers.

Telecommunications commissioner Stephen Gale said the paper detailed the Commission’s emerging views for designing the regulatory framework, which 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.

“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,” Gale said.

“In terms of quality, we are currently looking at which dimensions of quality matter to New Zealanders, and how they will flow through to standards we will require Chorus to meet.

“The quality dimensions are based on the stages of the fibre service lifecycle and include customer service, service availability and performance among others.”

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.

“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.”

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