$12m for regulator, $1m for consumers - ComCom

Commission seeks feedback on how to fund regulation for fibre network

Three years and $12 million is what the Commerce Commission thinks it will take to fund its work on developing a new regulatory regime for fibre networks. In addition, it suggests the telco sector might stump up another $1 million to support consumer representative groups.

The Commission has released a paper seeking input into how it can fund its work in anticipation that legislation currently before Parliament will be passed unchanged. The Telecommunications (New Regulatory Framework) Amendment Bill, would see the introduction of a regulatory framework that is similar to the electricity industry.

The Commission’s telco work is funded by the Government, which recovers the cost through the Telecommunications Regulatory Levy to the tune of up to $6 million per annum.  Those companies liable for the levy are telcos operating in New Zealand that have annual gross revenues over $10 million.

The Commission considers it will need a team of 15 full time staff to work on the new regulatory regime. This involves setting price controls and minimum quality standards for Chorus, as well as developing information disclosure requirements for Chorus and the three local fibre companies that have built the Ultra Fast Broadband Network. It may also need to provide a copper withdrawal code for areas in which UFB has been deployed.

“The proposed funding increase will ensure we can create an efficient and effective regulatory framework, with opportunities for meaningful and robust stakeholder and consumer engagement,” Telecommunications Commissioner Stephen Gale says.

The paper also proposes an additional $1 million to fund consumer representative groups, so they can take an active part in the consultation process. It notes this is an approach taken in Australia and the UK. The Commission cites the example of the Consumer Challenge Panel run by the Australian Energy Regulator, which is exists to “improve the quality of regulatory determinations.”

While it hasn’t undertaken “any design”, the Commission estimates that $1 million over three years is what it would cost to fund consumer representative groups.

This approach is likely to find favour with the Telecommunications Users Association, which has commented, in relation to the Bill, that “One element not addressed as a result of the review is the inequality of resourcing for consumer voice research and advocacy that exists in New Zealand when compared to other jurisdictions such as Australia.”

Feedback on the Commission’s funding paper will be need to be swift, with submission due by 11 May, although stakeholders will have an opportunity to air their views at a stakeholder workshop this week. 

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