The Commerce Commission's preparation for its new responsibilities within the Telecommunications Act 2001 moves forward with the appointment of consultants to assist with four major projects.

These appointments come two days after the telecommunications legislation was passed. The new legislation is aimed at reforming the telecommunications industry in New Zealand to deliver better outcomes for customers.

In September, the Commission issued requests for proposals (RFP) seeking responses from industry experts to assist with its new functions under the telecommunications regime.

The following consultants have been appointed:

  • a consortium of CostQuest of the U.S. and Amos Aked Swift (N.Z.) Limited to conduct an international benchmarking review of interconnection and retail-minus prices against comparable regimes; and assist with the preparation of a Practice Note on the application of a wholesale (retail-minus) pricing regime.
  • Frontier Economics of Melbourne to assist with the preparation of Practice Notes on the application of a Total Service Long Run Incremental Cost (TSLRIC) pricing methodology; and on the verification and allocation of Telecommunications Service Obligations (TSO) costs;

Background explanation

The Telecommunications Act 2001 introduces a number of regulatory functions for the Commission to perform in the telecommunications industry.

The Commission is required to conduct an international benchmarking review prior to making price determinations in disputes between an access seeker and an access provider.

This review incorporates both interconnection and retail-minus based wholesale regimes in comparable countries with regulatory frameworks similar to that proposed.

Definitions:

TSLRIC pricing methodology

TSLRIC is a forward-looking cost based on methodology that may be used by the Commission when conducting pricing review determinations.

TSO costs

Under Part Three of the Telecommunications Act the Commission is required to determine the cost incurred for the supply of declared TSO instruments and the allocation of amounts payable by all liable telecommunications companies.

Wholesale (retail-minus) pricing regime

Access seekers may apply to the Commission for a price determination on services or bundled services that they may resell under a wholesaling arrangement.

Media contact: Business Competition Branch Director Geoff Thorn

Phone work (04) 498 0958, cellphone 021 661 104

Communications Manager Jackie Maitland

Phone work (04) 498 0920, cellphone (025) 249 3407