The Commerce Commission has released draft guidance to help the telecommunications industry understand its approach to monitoring and enforcing obligations on Chorus and the other local fibre companies (LFCs) to allow retailers access to unbundled fibre services with acceptable terms and prices.

“Unbundling means that instead of buying access to the LFC’s full network, retailers can buy access to just the LFC’s fibre optic cables. The retailer can then install their own electronic equipment to deliver new broadband products and services, such as broadband plans for heavy data users who stream 4K television,” Telecommunications Commissioner Dr Stephen Gale said.

Undertakings with the Crown have obliged LFCs to offer an unbundled fibre service to retailers such as 2degrees, Vodafone, Vocus, Vector, Trustpower and Spark since 1 January 2020 on an equivalent and non-discriminatory basis, using networks developed as part of the Government’s Ultrafast Broadband initiative.

However, there has been some concern from retailers about whether the unbundled terms and prices offered are the equivalent of what the LFCs effectively supply to themselves when they provide standard broadband services.

“Unbundling is important as it is designed to promote competition and innovation in fibre broadband services,” Dr Gale said.

“This draft guidance is designed to help the telecommunications industry understand how we interpret the non-discrimination and equivalence obligations on the LFCs when exercising our monitoring and enforcement powers under the Telecommunications Act.”

Consultation is open on the draft guidance until 28 April 2020, with cross-submissions due by 12 May 2020. The Commission intends to publish its final guidance later this year. Feedback can be provided by accessing the project page on our website.

Background

The Government’s Ultra-Fast Broadband (UFB) initiative which launched in 2009 originally aimed to provide fibre-to-the-premises to 75% of New Zealand’s population by 2020 through the building of new fibre networks in major towns and cities throughout New Zealand. The programme was expanded twice in 2017, and now aims to achieve fibre-to-the-premises to 87% of the population by 2022.

These new fibre networks enable faster and more reliable voice and broadband internet services to be supplied to consumers. The LFCs (Chorus, Enable Networks, Northpower and Ultrafast Fibre) are required to provide unbundled fibre access to retailers to promote competition and innovation over fibre networks.