Earlier this week Communications Minister Simon Bridges introduced The Telecommunications Amendment Bill to Parliament. The bill sets out to update regulation for the fibre era. When it passes it will come into effect from 2020.
Parliament breaks for the election at the end of next week, the bill’s first reading is set to happen next week, from that point its timing depends on who forms the next government. It’s possible a Labour government or one including New Zealand First may revisit some aspects of the proposed legislation.
Once passed, the bill would mean a major overall of telecommunications regulation. In Bridges’ words, among other things it will:
- introduce a more predictable utility regulation model for UFB fibre,
- deregulate copper lines where fibre is available, and
- increase regulatory oversight to help improve quality of service for consumers.
Some of the details include a look at changing fibre regulation so that it is regulated like other utilities, such as electricity and gas. There is also a proposal to set the price for a voice and broadband anchor product. The idea is that the anchor products would be entry level products and would be a jumping off point for service providers to price the rest of their tariffs.
The intention is that the initial broadband anchor product will be a 100Mbps product from 2020.
Deregulating copper lines where fibre is available will simplify the overall regulatory framework. It will allow Chorus to withdraw copper services where fibre is available and/or raise prices to manage the migration. Outside of UFB areas the price will stay at 2019 levels, adjusted for inflation. This could be tricky for Chorus, but over time the fibre footprint is likely to expand beyond the reach of UFB and, anyway, there are alternatives for rural users including fixed wireless broadband from cellular carriers and the independent wireless internet service providers or Wisps.
Another change is the move to what is known as the building blocks model to regulate Chorus. Under the proposal Chorus estimates costs, adds a fair return on the investment. This means Chorus will be treated more like other utilities, although it will be subject to a revenue cap.