5G could widen digital divide, Chorus warns

Keep eliminating the digital divide at the forefront when formulating policy, Chorus tells government

Chorus has warned the Government that, without direct intervention, deployment of 5G cellular technology by New Zealand’s three mobile network operators could exacerbate the country’s digital divide.

The warning was issued in response to a request from the MBIE, sent to multiple organisations, for their perspectives on the challenges and opportunities of a 5G rollout.

“Chorus has today encouraged the Government to keep its objective of eliminating the digital divide at the forefront when formulating policy about 5G, so significant sectors of the economy do not miss out,” Chorus said.

CEO Kate McKenzie said the specific use cases and business cases for 5G were still unclear and the overall economics challenges, and therefore a business-as-usual deployment by three operators would be unlikely to achieve economically sustainable broad deployment.

“Commercial operators will, quite rightly, seek to generate a commercial return from their investments, meaning 5G rollouts are likely to be incremental, focused on cities and with potentially higher costs to consumers,” she said.

“But that may see significant segments of the economy, such as rural or the less able to pay, miss out while cities and the well-off get the benefit, and this will harm New Zealand’s overall competitiveness.”

Chorus said it had proposed a range of solutions to support the development of a 5G policy to most effectively address the digital divide.

“Options range from simple commercial site sharing agreements to only rolling out physical infrastructure once and using network slicing software technology to ensure vibrant competition, through to a fully regulated open access network, and a full spectrum of options in between,” McKenzie said.

“Already today Chorus assets are used by each of the mobile operators to provide their mobile services, and not all future sharing arrangements would require regulatory intervention.  A sensible exploration of all the options is warranted to effectively address the digital divide.”

McKenzie said also that, to support future innovation, some spectrum should be held back from any initial auction. She called for the findings of the Commerce Commission’s mobile market study to be factored into any policy decisions “to ensure any competition issues are not inadvertently deepened.”

The Commission launched the study in October 2017 to deal with what it said were a number of competition and regulatory questions that had been accumulating for some time as a result of fixed-mobile convergence, driven by evolving technology and evolving consumer preferences.

In March this year it expanded the scope of the study after receiving submissions expressing concerns with the current structure of the market, and issued a paper detailing the expanded scope for its study.

As regards 5g, the Commission said it would aim to identify “upcoming key events (eg, 5G deployment and spectrum allocation, and widespread eSIM), and how these events, given what we have seen from the past, might play out in terms of: competition (eg, physical infrastructure versus MVNOs); and consumer outcomes.”

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