Communications Minister Amy Adams: Telco Act prepares for 21st century upgrade

Communications Minister Amy Adams has released an options paper which seeks feedback on the Government’s new ‘utility-style’ model for regulating fixed line communications services after 2020.

“Every aspect of our lives is being transformed by changes to technology, innovation and digital convergence. The regime governing our telecommunications industry is now 15 years old and our review is critical to building a system that supports growth, investment and innovation,” says Adams, in a statement.

“We want to ensure high quality and affordable broadband services are available for New Zealanders. To achieve this, the Government is proposing to establish a durable and flexible framework that supports competition, innovation, and efficient investment for consumers.”

Submissions on the options paper close on 19 August.

In April, the Government announced high-level decisions to set up a new utility-style regime for fixed line communications services provided on the Ultra-Fast Broadband network and Chorus’ copper network after 2020. The options paper seeks more detailed feedback from industry and consumer groups on how this new regime will work in practice.

“The new regime is designed to increase long-term certainty in the telecommunications sector and reduce volatility. It also aims to support ongoing innovation and investment which will result in better services for consumers – meaning consistently improving speeds and quality at affordable prices,” says Adams.

“New Zealanders are already benefiting from world-leading broadband connectivity and speeds thanks to the roll-out of Ultra-Fast Broadband and the Rural Broadband Initiative, and this is set to continue with our extensions to these programmes.”

TUANZ: Some important issues left out

TUANZ CEO Craig Young says review options paper provided some welcome detail, but failed to address a number of issues important to end users.

“TUANZ has been arguing strongly for significantly stronger consumer disputes processes under the current mandatory code regime. However, the options released today leave this important function with the TCF,” he says, in a statement.

Craig Young, TUANZ CEO

Calls for a properly funded consumer advocacy group, and end-user focused research, have been ignored.

“There may be no choice but to push for the alternative option of an independent dispute and complaint model to ensure that management of disputes is user-friendly, and focused on their rights.

“It is also disappointing that calls for a properly funded consumer advocacy group, and end-user focused research, have been ignored. The successful Australian model proves that contestable funds are an effective way of providing these important services, and that leaving it up to the support from corporate entities is unrealistic.”

He notes, however, there are positive aspects for users in the options paper.

Better aligning the telecommunications industry with section four of the Commerce Act appears useful, as this is a well- understood mechanism in New Zealand, he says.

TUANZ is also broadly supportive of the principle of the building- blocks model of asset pricing, but is aware that significant work and discussion needs to take place on what elements are included, and how they will be applied in order to properly understand the asset base of the regulated entity.

“TUANZ will be consulting widely with its members on the options set out, in order to ensure that the final reforms reflect users’ perspectives on what is needed from the future of New Zealand’s telecommunications,” says Young.

InternetNZ has welcomed the paper, but says the options canvassed will require careful consideration. CEO, Jordan Carter, says: “The Telecommunications Act affects almost all New Zealanders – its rules are a critical part in setting the cost of broadband services in New Zealand. With Internet access an ever more important feature of people’s lives, and vital to New Zealand’s economic prospects, it’s very important to get these settings right. … This review has to deliver a regulatory framework that guarantees fair prices for fast broadband. It also has to guarantee certainty for what these prices will be after 2020. Consumers and businesses deserve nothing less.”

He adds: “Within the high level announcements, there’s a lot of detail needed – and that detail will determine whether the revised Act leads to households spending excessive amounts on broadband, or whether it strikes the right balance in protecting consumer interests. “Major issues we identified earlier were the difficulty in regulating mobile and fixed services and urban and rural services. … We will be interested to see how these issues are taken into account.” (with reporting from Stuart Corner)

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