Commerce Commission consults further on fibre input methodologies

24 Jul 2020

New Zealand’s Commerce Commission is inviting feedback on its consultation package for the development of input methodologies for the regulation of fibre fixed line access services. The Commission published its draft decisions late last year and has decided to consult further on a limited number of issues after reviewing submissions and cross-submissions. The Commission is also publishing a separate, second consultation paper on changes it is considering to its approach to valuing the financial loss asset. Any changes would involve adopting a discounted cash flow approach to valuation and different treatment of investments that pre-date the government’s Ultra-Fast Broadband initiative that aims to provide fibre connectivity to 87% of the population by 2022. The government’s Crown Infrastructure Partners contracted four companies to build these fibre networks: wholesale fixed line provider Chorus, and three local fibre companies (LFCs) – Northpower Fibre, Ultrafast Fibre and Enable Networks.

Under the new regulatory regime in Part 6 of the Telecommunications Act 2001, the Commission will set the maximum revenue that Chorus can earn from its customers and the minimum quality standards it must meet. Additionally, all four LFCs will be required to publicly disclose information on their performance, such as on their profitability, revenue, and capital expenditure. The regime first requires the Commission to determine input methodologies which set out the rules, requirements and processes for how the price-quality and information disclosure regulation will apply to the fibre network providers.

Interested parties can submit their comments on the main consultation paper and updated input methodologies by 13 August, with cross-submissions due on 3 September. The second consultation paper on the financial loss asset will be published on 13 August.