A paper released this week by the Commerce Commission lays out the organisation’s vision of how fibre networks will be regulated in the future. It’s a blueprint for how the industry will work once the UFB roll-out completes some time in 2022.
Last year’s Telecommunications Act says the commission must set up utility-style regulations for fibre networks. The goal is to promote a competitive market and to prevent fibre companies from making excessive profits.
One of the proposals is that Chorus will face both price-quality and information disclosure regulation. At first the other fibre companies, Enable Networks, Northpower and Ultrafast Fibre, will only be subject to information disclosure. Although that may change later. It means Chorus will have revenue caps and minimum quality standards. This is similar to the rules for electricity lines companies.
Telecommunications commissioner Dr Stephen Gale says; “The rules we are developing that underpin the revenue caps for Chorus will have an impact on the price consumers end up paying for broadband."
“We are keen to hear from consumer advocates on our current thinking around how we treat key issues such as the cost of capital and what is included in Chorus’ regulated asset base.”
As expected the Commerce Commission is sticking with 100/20Mbps as the anchor broadband service. Suppliers must provide these services and can only charge the contract price plus an annual CPI adjustment.
The new rules will mean fibre companies must provide an unbundled fibre service. Under the proposed regulations this will not have a price cap at first, although that could change later.
Broadband quality is also on the agenda. The new rules require fibre companies to publicly disclose performance information.
Gale says: “The quality dimensions are based on the stages of the fibre service life-cycle and include customer service, service availability and performance among others”.
The Commerce Commission expects to finalise the rules by June 2020.