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NZ govt releases policy framework for Telco Act review

The New Zealand government has outlined some key policy decisions that will change the way broadband and phone services are regulated post-2020.
Written by Aimee Chanthadavong, Contributor

The New Zealand government has announced a series of policy changes that will set the framework for a review of the Telecommunications Act 2001.

The government said from 2020 it plans to move to a framework that will regulate copper and fibre services similar to the one used for utilities like electricity lines, changing the way broadband and phone services are regulated.

The government has outlined that some of the key policy decisions will include moving to a utility-style model with "building blocks" pricing for regulating wholesale services on the copper and ultra-fast broadband (UFB) networks; considering ways to better support competition in the mobile market; retaining the current unbundling requirements to promote innovation on the UFB network from 2020; and ruling out any changes to the regulation of broadcasting infrastructure.

Communications Minister Amy Adams said the government is making changes now to ensure a high quality and affordable communication system is in place after 2019.

"Digital technologies are transforming the way New Zealanders live, work, and do business. To help reach our 2025 broadband target and to keep our economy growing, we need the right laws in place to make sure high quality and affordable communication services are available for consumers and businesses," she said.

"The communications sector is vastly different to the market in 2001 when the Telecommunications Act was introduced, and it's time for our laws to catch up."

Adams added that the changes to the regulation of fixed-line networks will provide investors with certainty and ensure consumers are protected once the UFB build contracts expire.

The review of the Telecommunications Act is part of the New Zealand government's convergence program that aims to update regulations in light of technological advances.

In September 2015, the New Zealand government released the Regulation Communications for the Future document that outlined the government's long-term vision for the communication sector. The paper outlined six challenges and asked a series of questions in an effort to prompt deep consideration of the changes that are reshaping not only the telecommunications industry, but media and entertainment as well. The government received 43 submissions from industry and consumer groups in response to the document.

that aims to update regulations in light of technological advances.

The policy announcements also contribute to the government's target that by 2025, 99 percent of New Zealanders will have access to peak speeds of 50 Mbps, with the remainder able to access speeds of at least 10Mbps.

Spark New Zealand has welcomed the approach the government has taken so far to reviewing the Telecommunications Act. The company's general manager regulation John Wesley-Smith said in a statement the government's commitment to making regulatory changes will ensure the health and competitiveness of the market.

"Wholesale lines charges make up about half the cost most New Zealanders pay for their broadband, so it's important we get these charges set right. It's also important to ensure all levels of the industry have the appropriate regulatory settings to encourage continued investment in better technology and services," he said.

Wesley-Smith went on to say that while the company understands the government periodically reviews regulatory changes, the New Zealand mobile market is already very competitive, pointing out all three mobile network operators in the country have made efforts to deploy nationwide networks including improved services for rural New Zealand.

At the end of last year, Spark NZ signed a memorandum of understanding with Huawei to boost mobile coverage across 3G and 4G networks.

However, last month, Spark NZ was criticised for being "impersonal" while Vodafone New Zealand was considered "unresponsive" by respondents to a mobile business research report that was compiled by the New Zealand Commerce Commission (ComCom). The report looked into the state of the mobile telecommunications competition among business customers.

Last week, the New Zealand ComCom announced it was reviewing the non-price terms of telecommunications carrier Chorus' unbundled bitstream access (UBA) service, examining whether the copper service will fulfil the medium-term needs of consumers.

During this review, the ComCom is exploring whether the service is future proofed; whether there are incentives for Chorus to continue investing in and innovating on its UBA; and whether the UBA service should be aligned with technical specifications of the service in the fixed pricing principles (FPP).

The ComCom is accepting submissions from interested parties until May 5.

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