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Fibre regulation: ComCom looks past 2022

A Commerce Commission paper released this week reveals likely future fibre network regulation.

The paper is a blueprint for how the industry will work once the UFB roll-out completes in 2022.

There are no surprises.

It is a response to last year’s Telecommunications Act. The Act requires the commission to set up utility-style fibre network regulation.

Competitive market

Among other things the Act aims to make sure there’s a competitive market. That’s hard when fibre networks are monopolies. It also aims to stop fibre companies making excessive profits.

The proposed regulations treat Chorus much like an electricity lines company. It faces price-quality and information disclosure regulation. Chorus will get revenue caps and quality standards.

Enable Networks, Northpower and Ultrafast Fibre, will only be subject to information disclosure. At least at first. The Commerce Commission may impose the other rules on these companies later.

Telecommunications commissioner Dr Stephen Gale says the rules will affect the price consumers pay for fibre.

“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.”

There’s a good chance the telcos will challenge the asset base calculations.

Anchor service

As expected the Commission is sticking with 100/20Mbps as the anchor service. Fibre companies must provide this service. They can only charge the contract price plus an annual increase for inflation.

The fibre companies have already moved towards providing unbundled services. This is due to begin at the start of next year. For now, the Commission will not regulate unbundled fibre prices. It says it may revisit this later.

That now looks likely. Vodafone and Vocus say they are unhappy with Chorus’s proposed unbundled fibre price.

Fibre regulation includes quality

Broadband quality is also on the regulator’s agenda. The new rules say fibre companies must 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.

There’s a summary of the paper at the Commerce Commission website.