While the 2022 fibre regime was working well, regulator says it needs to keep pace with market developments.
The Commerce Commission has issued an open letter to initiate a work programme looking at the evolution of the regulatory regime for fibre broadband services.
Telecommunications commissioner Tristan Gilbertson said while the new fibre regime was working well, it needed to keep pace with market developments.
“Maintaining the certainty required for ongoing investment in world-class fibre means having the right rules in place now and into the future – so we’re launching a programme of work to ensure we keep the balance right,” he said.
New Zealand’s fibre networks were built between 2012 and 2022 by four regulated fibre wholesalers: Chorus, Enable, Northpower and Tuatahi, in partnership with the government.
The commission implemented a new regulatory regime for fibre, as required under the Telecommunications Act, in 2022. This recognised the natural monopoly characteristics of the infrastructure and was designed to promote consumer interests over the long term.
The new review is proposed to start with the underlying framework of rules for fibre services – the relatively new fibre input methodologies – focusing on cost of capital, the rules for new capital investments, and the controls applied to Chorus, the country’s largest wholesaler.
“We also expect to identify opportunities for streamlining current rules and processes as we look across the input methodologies as a whole,” Gilbertson said.
The commission is also proposing to review the cost of capital for fibre in parallel with the other sectors it regulates, such as energy networks and airports.
The commission would then move on to look at other aspects of the fibre regime subject to review including potential deregulation, Chorus’ revenue cap, declared services and information disclosure.
“This work is critical to ensuring the regime remains well calibrated and continues to deliver for competition and consumers,” Gilbertson said.
The commission is calling for views by 5pm on Tuesday, 29 April.
In February, Chorus lodged a plan with the Commerce Commission that would see it slash $200 million of fibre network investment.
The $40 million plan would extend the company’s fibre broadband network to 10,000 more premises but leave 30,000 more outside of its coverage area.
