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Telco regulation -- where to next?

Jordan Carter and Susan Chalmers | Feb. 27, 2013
Telecommunications is one of the more competitive industries in New Zealand.

Both Chorus and the Minister said that these reviews would increase certainty for investors. It's difficult to see how a review increases certainty for anyone -- at least in the short term.

What's done is done, as they say. A broad review of the whole telco framework is nonetheless on the cards. Here are some initial suggestions as to how it can best work to minimise the uncertainty now created, and to support better broadband services for New Zealanders:

1. Make sure the whole review is open and transparent, so everyone knows what's happening.

2. Focus some attention on assessing Chorus's claims that the Ultra Fast Broadband scheme is threatened. Run a ruler over their numbers. Find out why they signed up to an agreement that only 18 months later they now claim is unworkable.

3. Encourage the Commission to complete its copper (UBA) price determination as quickly as it can, so that the initial price is known rather than just the draft.

4. If the Commission keeps the price as is, and if running the ruler over Chorus's numbers shows they are right in identifying a problem, be open-minded about what the solutions might be. Don't prejudge the outcome in other words.

5. Do nothing to encourage suspicion that the government wants to second guess the Commission. Viable competition needs a strong independent regulator.

6. Keep to the principle that competition drives investment. Don't fall for special pleading that the relationship is reversed. Maintain a neutral framework for regulation too -- don't break the framework to specifically favour fibre.

7. Consider earlier work by the Commission that video content is a key driver for UFB uptake. The economic boost promised by fibre can't happen until most households have it. If more access to video is needed, include that as part of the policy review.

These are starters for ten. We welcome feedback about InternetNZ's approach. Telco is vital to the future of the internet -- and above all, New Zealand needs a workable approach to building the next generation of broadband infrastructure.

With a review under way, everyone needs to help get an outcome that works.

Carter is Chief Executive (Acting) and Chalmers is Policy Lead at InternetNZ.


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