Under the Telecommunications Act 2001 we have two primary functions. The first is to regulate certain fixed-line and mobile services by setting the price and/or access terms for that service. The second is to monitor and report on competition, performance and developments in telecommunications markets. Both of these functions are focused on promoting competition and transparency in telecommunications markets for the benefit of consumers. In addition, we are also responsible for allocating the exact amount telecommunications providers must pay in Government levies each year.

The Government completed its review of the Telecommunications Act in 2017. On 7 November 2018, Parliament approved amendments to the Act which change how we regulate the sector from 2020 on.

Telecommunications for consumers

The world of telecommunications can be complex. Our consumer advice is designed to provide consumers with information to help them make informed purchasing decisions, enter into a fair contract with a provider, ensure they receive accurate and understandable bills, and provide advice about where to turn if things go wrong.​

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Fixed-line telecommunications regulation overview

The regulation of fixed-line telecommunications is complex and there is a new regulatory regime coming into force in January 2022 for the regulation of the ultra-fast broadband fibre networks. To help stakeholders understand fixed line telecommunications regulation in New Zealand we have provided an overview, available here.

Under the current Act, our role in regulating broadband services revolves around Chorus' copper lines network. This is the network that provides broadband and telephone landlines to the majority of households in New Zealand. We are responsible for setting the wholesale prices Chorus can charge other telecommunications providers to access its copper network and cabinet software. These services make up roughly half the cost of your average broadband package delivered over the copper network.

We last set the price for these services in December 2015 using a forward-looking cost based method as required under the Act. See more information on this process.

Changes to the Act passed in Parliament on 7 November 2018 provide for regulation of the ultra-fast broadband (UFB) fibre networks, as the use of copper services declines. The new regulatory regime require us to regulate Chorus in a similar manner to how we regulate electricity line and gas pipeline businesses. This involves setting the maximum revenue Chorus will be allowed to earn from its UFB network and the quality of service it must deliver. Local fibre companies (Enable, Northpower and Ultrafast Fibre), will also be subject to information disclosure regulation, which means they must publish key information on their revenue and performance each year.

Under this new regulatory regime, we are required to set the rules (input methodologies) for how UFB assets will be valued and costs recovered. These rules, and the regulation they underpin, must be in place before 2020. However, an extension of up to 2 years is possible.

In regions where the UFB network is in place, the copper network will be deregulated and the regulations that provide for price-capped landline and dial-up services will be removed. In areas where UFB or other fibre is not available the current regulations will remain in place to ensure consumers continue to have access to basic services at competitive prices, even when alternative networks are not available.

Along with broadband, we also regulate certain voice (mobile and landline) services. This includes number portability – ensuring consumers can keep their phone number when they switch providers – the termination rates mobile providers charge each other, and allowing retailers access to Spark's voice services. Every 5 years we are required to review whether the existing services should be deregulated.

Our role under the Act includes market monitoring responsibilities:

  • monitoring competition in, and the performance and development of, telecommunications markets
  • conducting inquiries, reviews, and studies relating to the telecommunications industry.

By monitoring the market and publishing reports on its performance we are able to compare how the services available to New Zealand consumers measure up against international standards in terms of cost and quality. While New Zealand has some unique features that make direct comparisons to other countries difficult, our annual monitoring reports allow us to report on trends in the market and assess whether consumers are benefiting from competition. We are also able to undertake targeted inquiries to gain a better understanding of issues in the market.

As well as undertaking our own monitoring, we sometimes contract other parties to undertake studies or monitoring. We currently have a contract with Sam Knows to monitor broadband performance and publish monthly reports, which are available on our website.

The Telecommunications Development Levy (TDL) was established by legislation in June 2011. The levy is set at $50 million a year until 2019, which we are required to allocate proportionately to qualifying telecommunications providers.

The government uses the annual levy to pay for telecommunications infrastructure including the relay service for the deaf and hearing-impaired, broadband for rural areas, and improvements to the 111 emergency service.

The levy – about 1% of telecommunications services revenue – is paid by companies, or groups of companies, earning more than $10 million per year from operating a component of a public telecommunications network (fixed or wireless).