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New information disclosure requirements for regulated fibre wholesalers
The Commerce Commission has established information disclosure requirements for the country’s four main wholesalers of fibre services as part of the new regulatory regime taking effect from 1 January 2022.
The regulated fibre wholesalers are Chorus, Enable Networks, Northpower Fibre and Tuatahi First Fibre (previously Ultrafast Fibre).
Telecommunications Commissioner Tristan Gilbertson said the regulated fibre wholesalers will need to publicly disclose key information about pricing, performance and other key metrics so that the Commission and stakeholders can understand how they are performing individually over time and when compared to each other.
“Our experience regulating infrastructure businesses in the energy and airports sectors shows that information disclosure can be a powerful tool, with increased transparency helping to limit excessive profits and ensure services are delivered to the quality demanded by consumers,” he said.
“Information disclosure is the foundation of the new regime. It sits alongside the price-quality regulation of Chorus and anchor service protections for the base-level fibre services that Chorus must provide. Together, these measures will help to constrain the prices and promote the quality of services offered by Chorus and the other regulated fibre wholesalers.”
Information disclosure requirements apply to the four regulated fibre wholesalers and include important data on pricing, current and future expenditure, quality performance, financial statements, contracts and the fibre providers’ management of their assets. The Commission will analyse the information disclosed and publish a summary and an analysis for the purpose of understanding whether the purposes of regulation are being achieved.
Price-quality regulation will apply to Chorus, but not the three smaller regulated fibre wholesalers. It sets a cap on the total revenue that Chorus can collect for fibre services provided over its network and the minimum quality standards it must meet. The Commission will announce a price-quality path for Chorus on 16 December for the first regulatory period from 1 January 2022 through to 31 December 2024.
Anchor service protections
Anchor service regulations are recommended by the Minister for the Digital Economy and Communications and apply only to a wholesale fibre broadband and a voice service that Chorus must offer. They include quality standards plus a CPI-adjusted price cap. The current anchor broadband service is a 100Mbps download service. The Minister also recommends the maximum price and quality standards for a direct fibre access service (DFAS) that Chorus must provide to connect commercial users including fixed wireless and mobile providers.
Both the anchor broadband and voice services and the DFAS service ‘anchor’ the price and quality of other fibre service offerings that Chorus offers retail service providers.
Mr Gilbertson said that the information disclosure requirements were designed around the contractual reporting obligations in place when the wholesalers built their fibre networks under the Government’s Ultra-Fast Broadband (UFB) initiative and will be progressively phased-in to minimise compliance costs and complexity.
"One of the reasons the UFB rollout was so successful was that fibre wholesalers were required to provide key information about performance,” he said. “The requirements we are announcing today build on that to continue the high-level of performance and quality that New Zealanders have come to expect and to provide a baseline for regulated fibre wholesalers to continue to build on.
“We expect to continue to refine these requirements over time, as the performance of regulated fibre wholesalers becomes better understood, and to reflect ongoing changes in the industry landscape.”
The reasons paper setting out the information disclosure requirements is on the Commission’s website.
Developing a new regulatory regime for fibre services
New Zealand’s fibre networks were built by the four main fibre wholesalers in partnership with the Government under its Ultra-Fast Broadband (UFB) initiative. With the build phase almost complete, the Government introduced a new regulatory framework in 2018 through the Telecommunications (New Regulatory Framework) Amendment Bill.
The Commerce Commission was appointed as the regulator of the new regime, which has the long-term benefit of fibre end-users at its heart. The regulatory framework recognises that fibre access is a critical driver of digitisation and supports the Government’s wider priorities, including delivering a growing economy that works for everyone.
The telecommunications sector is changing rapidly with end-user demand for data and services growing and broadband technology responding—or leading—the change. To develop and put in place a robust and adaptable regime to help industry manage these challenges and deliver the best price and quality outcomes for consumers, the Commission has consulted with industry and other stakeholders over the last three years
This involved setting the underlying rules and processes for the regime last year and applying these input methodologies (IMs) to develop today’s information disclosure requirements for all regulated fibre wholesalers and the price-quality path for Chorus that will be announced on 16 December.