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Adams rings in changes for telco networks

NZ NewswireNZ Newswire 13/04/2016 Pattrick Smellie

The copper and fibre-optic networks used for New Zealand telecommunications services will move to a simpler form of regulation, Communications Minister Amy Adams says.

A review of the Telecommunications Act is also likely to see tweaks to the existing regime for mobile telecommunications infrastructure, to force more sharing of mobile towers by competitors and the possibility of regulation for the price of roaming services to promote mobile competition, which is judged to be "still vulnerable".

"While there's a requirement for telcos to provide a roaming service over their physical networks, there's no regulatory requirement on the price they can charge," Adams told BusinessDesk, referring to the mobile competition issues.

"It's all very well to have a requirement to offer something, but if the price can't somehow be looked at it can be effectively defeated by non-economic charging."

The new regulation for the fixed-line network will have greatest impact on Chorus, the owner of the bulk of the country's copper and fibre network, and would be applied to both the old copper technology and the new fibre network.

Chorus chief executive Mark Ratcliffe welcomed the certainty that he expected a new regime would bring after a six-year process that saw several major changes in the proposed differential between charges for copper and fibre services.

The changes will do away with the price-setting methodology at the heart of that uncertainty, known as Total Service Long Run Increment Cost, or TSLRIC.

"TSLRIC is designed to promote infrastructure competition, which is no longer our primary goal," says a six-page summary published by the Ministry of Business, Innovation and Employment.

The announcements also point to a need to protect consumers in the transition to a new regulatory regime by ensuring price stability, particularly for basic 'anchor products', which the government will consider identifying.

Internet NZ welcomed the decisions.

"Minister Adams has rightly set aside calls by some in the telco industry to allow an 'industry-led solution' to manage pricing after 2020. Regulating copper and fibre broadband wholesale prices from 2020 is the right move for internet users, the industry and for network builders like Chorus," said the lobbyist's chief executive, Jordan Carter.

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