Parliament has recently passed some major amendments to key pieces of legislation we enforce.
We have been working behind the scenes in an advisory capacity to encourage legislation that is workable and effective and to ensure we have the resources, people, processes and systems in place to enforce the amended laws. This includes making sure businesses are aware of their obligations and consumers of their rights.
A brief overview of the key changes are outlined below.
We now have the power to conduct market studies. A market study is a study into the factors affecting competition for particular goods or services, to find out how well competition is working and whether it could be improved. We do this by investigating the features of the market, including regulatory and competition features and patterns of consumer and supplier behaviour. By gathering and analysing information on a market we can identify whether there are features preventing it from working well. We can then look at the effects of features identified and consider how they can best be addressed using proportionate means. Outcomes of our work may range from a ‘clean bill of health’ for the sector to, where we consider it appropriate, recommendations for changes to enhance market performance. Our recommendations are non-binding; however, the Government must respond to any recommendations within a reasonable period.
The Government initiated the first study into retail fuel markets and we commenced the study on 6 December. The terms of reference for the study is available here. We intend to publish working papers during the first half of this study, with a draft report released by August next year and the final report in December 2019. Last week we also released a process paper and draft guidelines. Submissions on the draft guidelines are due by 31 January 2019. More information about the market study can be found here.
The Commerce Amendment Bill also strengthened the regulatory regime for New Zealand’s three major international airports. The amendments allow for a streamlined Part 4 process for us to recommend to the Minister to allow for either negotiate-arbitrate or price-quality regulation to be added to the current ‘sunlight’ regulation. If the Minister agrees with our recommendation the new type of regulation can be added via Order in Council as opposed to legislative reform.
The Amendment Act also permits enforceable undertakings for use in resolving Commission investigations into anti-competitive conduct and breaches of regulatory obligations. Enforceable undertakings are binding commitments from a party to the Commission to do, or not do, certain things. If breached we can seek orders from the Court to ensure the commitments are fulfilled. Enforceable undertakings will enhance the efficiency of New Zealand’s competition and network regulation enforcement and align our laws in this area with international best practice.
The legislation establishes a price-quality regime for Chorus by setting the maximum price it can earn from its ultra-fast broadband network and the quality of service it must deliver. It also requires Chorus and local fibre companies (Northpower Fibre, Ultrafast Fibre, and Enable Networks) to publicly disclosure information around their revenue, performance, and quality. We are working closely with stakeholders to develop the new regime and we have recently held workshops for interested stakeholders to discuss key issues. We have also published a paper on our proposed approach to implementing the legislation and key issues we will be consulting on. Submissions on the paper are due by 21 December 2018 and cross-submission by 25 January 2019. More information is available here.
Retail service quality
The legislation gives us more tools to improve retail service quality for consumers. The new provisions require us to monitor aspects of retail service quality including performance, speed and availability, customer service and billing and installation issues. It also requires us to periodically review the Telecommunications Dispute Resolution scheme, provide information for consumers to help them make more informed purchasing decisions, and create retail service quality codes if industry-led codes are inadequate. A copy of our framework paper can be found on our website. We will publish another paper early next year on how we plan to engage with consumers and industry stakeholders to set up the collection of retail service quality data. That paper will also provide initial thinking on what metrics could be good indicators of retail service quality.
Copper withdrawal code and 111 contact code
The legislation will see us regulate when Chorus can stop providing copper-based voice and broadband services in areas where fibre broadband is available. We are developing a copper withdrawal code that sets out the rules that must be followed before Chorus can stop providing copper services. We are also required to develop a 111 contact code which will require retailers to ensure that ‘vulnerable consumers’ have, at no cost, an appropriate means of contacting 111 for emergency services in the event of an power outage. We currently have a process and issues paper out for consultation which can be found here. We will also be providing an update on our process for the 111 contact code before Christmas.