Commerce Commission mulls deregulating Sparks’ resale services

Emerging competition from other wholesale alternatives means it is time to review the regulations, says Telecommunications Commissioner

Telecommunications Commissioner Dr Stephen Gale

Telecommunications Commissioner Dr Stephen Gale

The Commerce Commission is to look at deregulating Spark’s resale services – services it provides to other telcos to enable them to provide fixed line phone services to end users without investing in their own infrastructure.

The prices Spark can charge for these services are controlled under the provision of the Telecommunications Act 2001 because of a lack of alternatives. However, Telecommunications Commissioner Dr Stephen Gale said emerging competition from other wholesale alternatives meant it was time to review the regulations.

The decision is the outcome of the Commission’s five yearly review of Schedule 1 of the Telecommunications Act 2001. The draft decision of that review was published on 29 of April and the Commission has announced its final decision after reviewing submissions to the draft. It will publish its reason for the decision on 5 July.

Gale said: “We believe Spark faces increased competition from other wholesale alternatives such as ultra-fast broadband and Chorus’ baseband services, which enable RSPs to provide retail voice services to consumers. Having considered submissions, in our view the time is right to investigate deregulation further.”

He said the Commission had decided to maintain regulation of other services covered by Schedule 1 on the basis that they “remain important wholesale inputs that support the supply of vibrant and competitive retail voice and broadband services.”

These services include Chorus’ unbundled bitstream access (UBA), UBA backhaul, unbundled copper local loop (UCLL), UCLL network co-location, UCLL network backhaul (distribution cabinet to telephone exchange), UCLL network backhaul (telephone exchange to interconnect point).

However a future review of the regulated status of some of these services in on the cards. Gale said the Commission intended to monitor the provision of backhaul services.

“We recognise that the provision of backhaul services has evolved considerably in the years since they were regulated. A number of issues relating to competition and the current service descriptions have been raised in submissions during the current process. We expect to produce an issues paper towards the end of this year to obtain further information and industry views on this matter.”

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