Even if Telecom NZ decides to structurally separate in an effort to join onto New Zealand's $1.5 billion Ultra-Fast Broadband initiative, there will still be monopolies on the network, according to New Zealand Communications and Information Technology Minister Steven Joyce.
Steven Joyce (Credit: NZ Government)
"Should [Telecom NZ] decide to structurally separate, it will represent a major change to the structure of the telecommunications industry in this country," Joyce said at Huawei's Ultra-Fast Broadband Technology Summit in Auckland today, but said that network partnership arrangements with the government's fibre company Crown Fibre Holdings (CFH) would naturally tend towards monopolies that would still require government regulation.
Last week it was announced that Telecom NZ was one of 14 fibre companies shortlisted by the NZ Government's fibre company Crown Fibre Holdings as possible partners on the initiative, which aims to provide fast broadband to 75 per cent of New Zealand premises in 10 years. However, the company missed out on being one of the first that the Crown Fibre Holdings (CFH) would negotiate with.
"The infrastructure side tends towards natural monopolies. We don't know that yet, it depends ultimately on who partners with Crown and what assets are not involved in that partnership as to the level of infrastructure competition in the marketplace," he said. "The regulatory environment might be different depending on who [CFH] partner with."
"We've proposed that there be some contractual stuff with CFH, which will control prices and that's one way of achieving it," he added.
On Wednesday, the NZ Ministry for Economic Development released a discussion paper calling for submissions on the potential implications of a structural separation of Telecom NZ and what regulatory changes may be required.
"Should the government be required to make regulatory changes, we're ready," Joyce said today.
Although it hasn't been confirmed by Telecom NZ, the paper suggests the separation would see the company separate from its access networks, regional backhaul and most exchanges. However, unlike NBN Co's $11 billion deal with Telstra in Australia, Telecom NZ will still retain its copper network for public switched telephone networks.
Joyce joked that in his other role as transport minister, he saw the Ultra-Fast Broadband initiative as the "end game".
"We can stop building transport infrastructure when people can work from home," he joked.
Crown Fibre Holdings CEO Graham Mitchell told the conference that the company would make network partner recommendations for the ultra-fast network to the NZ Government in late October.