Shake-up ahead for mobile and online content providers in major NZ telecoms review

Tuesday 8th September 2015

New Zealand's government has commenced the biggest review of the telecommunications and broadcasting markets since the advent of the internet with today's release by Communications and Broadcasting Minister Amy Adams of a discussion paper for public submissions.

"Regulating Telecommunications for the Future" kicks off a full review of the Telecommunications Act 2001 to reflect the fact that current regulations were created in an age where voice calling was the primary service provided by telcos, whereas today there is rapid convergence occurring between telecommunications and broadcasting. People are increasingly watching television, listening to radio and reading traditionally printed material online, and there has been a huge shift in the use of mobile and multiple devices.

Also up for review in the process is the 1989 Broadcasting Act.

While the paper doesn't see mobile networks competing directly with fixed line telecommunications in the near future, it does outline the case for increased competition between mobile providers, while acknowledging the need for regulations capable of dealing with much of the content consumed online being broadcast by international providers rather than New Zealand companies.

“Digital convergence, new technology and innovation are transforming the way we live, work and do business and communication networks have come a long way since the Telecommunications Act was passed in 2001," Adams said in a statement. "This review is a critical step in ensuring we have a regulatory regime which supports growth, investment and innovation in these sectors into the future."

Chorus, the monopoly owner of copper and fibre-optic cable networks carved out in 2011 from the old Telecom Corp. now called Spark, welcomed the paper in part because it promises to put an end to years of uncertainty and unexpected changes to its regulation.

In particular, the paper recommends abandoning the current approach to calculating regulated prices for network access, based on other countries' pricing, to a so-called 'building block model', based on the known price of providing services in New Zealand and similar to that used for setting prices charged by electricity network monopolies.

"Structural separation of wholesale and retail, open access, and non-discrimination have essentially eliminated the problems that the 2001 legislation was trying to solve," said Chorus general counsel Vanessa Oakley in a statement. "However, the market structure today is substantially different and our changing digital environment, which upgraded communications infrastructure supports, requires new thinking to support outcomes for New Zealand.

“We agree that there is a strong case for a utility-style building block model of regulation."

Spark's general manager for regulation, John Wesley-Smith said "ensuring industry players have certainty to continue investing in New Zealand’s digital future should be the main thrust" of the review.

On mobile competition, he said “the next challenge ... is to ensure our regulatory framework creates the right incentives for mobile operators to extend the next generations of mobile broadband technologies deep into rural New Zealand, and it is timely to review the best way to achieve this.”

The discussion paper says recent gains in mobile market competition "appear vulnerable."

"A breakdown in roaming agreements or an inability for all three networks to extend future technology rollouts, like 5G, beyond urban areas could significantly impact the market."

It proposes that new rules cover shared national infrastructure to promote equal levels of coverage for all providers, and notes "significant uncertainty" in current arrangements for allocating mobile spectrum to new and existing mobile industry players.

Internet New Zealand chief executive Jordan Carter said the paper "accurately identifies many of the limitations and challenges present in the current legislation" but warned the whole industry was heavily committed to the long-running Commerce Commission attempt to set a new regime for pricing access to the copper network.

"The outcomes of this are highly relevant to any legislative review and it is imperative that enough time is given to have both matters adequately considered," said Carter.

BusinessDesk.co.nz

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