Communications minister Simon Bridges has revealed final details of the Government’s telecommunications reforms, expected to come into force from 2020, saying they will introduce a more predictable utility-style model for Ultra-Fast Broadband (UFB) fibre, deregulate copper lines where fibre is available, and improve the quality of service for consumers by increasing regulatory oversight.
Release of the details follows the issue of an options paper in July 2016. This was followed with the release of a consultation paper in February 2017 setting out details of how the government proposed to regulate access to the copper telephone network beyond 2020.
Under the new regime, where fibre is available, copper lines will be deregulated from 2020. Where fibre is not available (in rural areas), copper lines will continue to be regulated.
To complement the fixed line regulatory reform, the Government says it will streamline regulatory processes for mobile regulation. It has also decided to augment consumer safeguards and to provide more regulatory oversight of retail quality standards and dispute resolution processes.
Bridges said the changes should lift the level of consumer service quality in the telecommunications sector. “UFB is already available to more than one million homes and businesses in New Zealand, and over 85 per cent of New Zealanders will be able to access the high speed network by 2024.”
He said the reforms would reduce compliance costs for industry and further encourage innovation and investment, for the long-term benefit of consumers.
“A mixed bag” says Internet NZ
Internet NZ has described the package as “a mixed bag for Internet users.” CEO Jordan Carter said: "There are some wins for the public here. The new proactive powers for the Commerce Commission to ask tough questions about the quality of service people can expect are good to see. There are too many complaints by consumers in the telco sector and it has to change.
"On the down side, tweaks and adjustments to the post-2020 framework will see more money go into Chorus’ hands from users of copper broadband services outside the fibre broadband area. That means slightly higher broadband prices.”
He added: "Another downside: the government is still proposing that today’s entry-level broadband product (100/20) can serve as an ‘anchor product’ in 2020. It was too slow last time they proposed it, and it’s too slow today.”
Spark is supportive
Spark’s response was less equivocal. It welcomed the outcome with general manager regulatory affairs, John Wesley-Smith, saying it had provided certainty to industry providers and their customers of the regulatory settings that will apply to fibre and copper in the period from 2020 onwards.
“Giving service providers and network operators a more predictable pathway for the costs we will face from 2020 on will allow us to focus on ensuring we can confidently invest to bring the best of new products, services and innovation to New Zealanders,” he said.
Commenting on the decision not to further regulate the mobile market, Wesley-Smith said: “By global measures New Zealand is very well served by three mobile service providers who compete aggressively on price, speed and coverage. The next challenge for our sector is to extend the next generations of mobile broadband technologies deep into rural New Zealand, where the economics of service delivery are more challenging.”
TUANZ suggestions incorporated
TUANZ CEO, Craig Young said his initial take on the government’s announcement was that several of TUANZ’s proposals during the earlier stages had been taken up.
“Today's package confirms most of the details around the post 2020 regulatory environment for fixed lines services,” he said. “While the basis of it remains significantly unchanged since previous announcements, there are a number of changes where some of TUANZ concerns have been considered.
“We are pleased to see that while it does not fully address our concern that the 100Mbps download product will be superseded by faster service even as early as 2020, it is an improvement to see that the anchor product that will be price capped for fibre services has now been defined as an entry level product rather than the most popular.”
He added that TUANZ remained concerned over the deregulation of copper services inside UFB areas, but said it would work with the Commerce Commission on ensuring there were strong consumer protections within any customer migration codes put in place post the deregulation.
“Rural users will be relying on the copper network for many years to come and so regulation of price and quality of that network as well as the protections under the TSO will remain incredibly important,” he said.
He welcomed the minister’s announcement of an independent review of the mobile market. “We have been consistently calling for an independent review of the mobile market to ensure that it is delivering internationally competitive services to New Zealanders, and it is pleasing to see the announcement that the Minister will provide a recommendation to the Commerce Commission that they undertake such a study, albeit of the wholesale part of the market,” he said.
He also welcomed plans to strengthen the Commerce Commission’s powers around consumer service and consumer disputes, but said: “There remains significant work that still needs to be undertaken as well as more detail that needs to be developed in the substantive parts of the proposal. There are other changes made that need to be considered such as the impact of removing the restrictions on Chorus relating to layer 2 and end to end services.”