Tuesday, 19 November 2019 11:54

NZ regulator proposes new regulatory regime for broadband networks Featured

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NZ regulator proposes new regulatory regime for broadband networks Image stuart miles, FreeDigitalPhotos.net

New Zealand’s competition regulator The Commerce Commission has released a draft decision on a new regulatory regime for the country’s fibre broadband networks, requiring the companies to publish performance measures, such as profits, quality of service, and expenditure.

“It’s our job to make sure critical national infrastructure, like fibre broadband networks, work for the long-term benefit of consumers. Our new regulatory regime for fibre aims to ensure quality fibre internet services are delivered to New Zealanders at an appropriate price, at the same time as incentivising providers to invest, innovate and run their networks efficiently,” Telecommunications Commissioner Dr Stephen Gale said.

The new regime will apply from the beginning of 2022, by which time the Commission says most New Zealanders will have access to ultra-fast fibre broadband (UFB).

 For New Zealand’s largest telco Chorus, the regulation takes the shape of a revenue cap, which will limit the prices consumers pay for broadband, as well as minimum standards for things like service availability and network performance.

Chorus and the other local fibre companies (Northpower Fibre, Ultrafast Fibre, and Enable Networks) will also be required to publish performance measures, such as profits, quality of service, and expenditure - colloquially known as ‘sunlight regulation’.

“This paper outlines our draft decisions on the ‘input methodologies’ – the building blocks of the regulatory regime. They include the allowed rate of return and the value of the assets on which the providers they can earn a return,” Dr Gale said.

“We have also made draft decisions on the service quality dimensions that we will measure providers’ performance against. These are critical to the experience fibre consumers receive in areas like customer service, rectifying faults and the installation process.

”The Commission has made draft decisions on three key areas since its emerging views were published earlier this year, including a new way of passing through to consumers the Crown subsidy for UFB, and higher allowances for risk in the allowed rate of return (specifically, an asset beta of 0.49 and a market risk premium of 7.5%).

“With consumers and businesses increasingly demanding ubiquitous, high speed internet connections to support an ever-expanding range of activities, it’s important we create a robust and enduring regulatory framework. We welcome feedback from stakeholders on our draft decisions over the coming weeks,” Dr Gale said.

The Commission says it will publish its final decisions on the input methodologies in mid-2020, before setting the revenue cap and minimum quality standards for Chorus and the information disclosure regime for all providers in late 2021.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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