Regulator dials up new congestion standard for Chorus

Tuesday 14th March 2017

The Commerce Commission wants to keep closer tabs on congestion over the country's copper telecommunications network to make sure the quality of service is maintained as the volume of broadband traffic grows.

The regulator today released its final decision on the service requirements for the standard terms determination for unbundled bitstream access (UBA), which effectively sets the terms of service Chorus has to offer retailers. The main change was signalled in the commission's November draft decision and aims to ensure a segment of the network has uncongested links and require Chorus to report on usage where parts of the lines are nearing capacity.

The new standard means Chorus has to ensure congestion on a part of the network known as local aggregation path can't exceed 95 percent for more than five minutes. The regulator had planned to use a 15-minute reporting period but decided to reduce the timeframe to "minimise the risk of end-users experiencing sustained periods of congestion" because the longer period gave "more ‘headroom’ to disguise periods of congestion, increasing the risk that end-user experience is affected".

Chorus will also have to provide internet service providers information about internally approved plans to improve capacity when those parts of the network exceed 80 percent capacity, something the regulator said it should be able to do given it kicks off investment planning when congestion reaches 65 percent, the report said.

The regulator's review of the terms came after Chorus proposed new commercial UBA service and changes to the delivery of regulated services that could have limited performance at peak times in 2014, triggering a complaint from Spark that the network operator was in breach of the rules. Chorus put its plans on hold and the regulator embarked on the current review.

The commission decided against changing the processes for Chorus to introduce new variant services with the changes expected to " provide the necessary clarity on the regulated UBA service performance".

The regulator also decided against amending terms for VDSL technology, which it viewed as already being captured by the existing rules.

The final decision comes as relations between Chorus and its biggest customer, Spark New Zealand, remain tense with a TruNet report funded by the network operator today claiming fixed wireless speeds match ADSL copper technology but are significantly slower than VDSL and fibre services.

Spark has been looking to cut its reliance on Chorus's network and has been pitching its wireless service as a viable alternative to copper-based lines, which it has accused of being unreliable in harsh weather. Of Spark's 675,000 broadband connections, 138,000 are on fibre and more than 40,000 are on wireless broadband.

The government is considering whether to deregulate parts of the copper network where it competes with fibre from 2020 as a broader review of the telecommunications regulatory framework. Such a move would include a requirement for Chorus to keep supplying copper services capped at 2019 levels outside those areas.

Telecommunications Commission Stephen Gale said UBA broadband services will be "a key input for retail broadband for some time yet", especially in areas outside the government-sponsored ultra-fast broadband network.

"We are confident that the new standard will not lead to inefficient investment, even if copper is deregulated in UFB areas as currently proposed by MBIE (Ministry of Business, Innovation and Employment)," he said.

The regulator said it would also exempt about 19,000 lines on Chorus' remote legacy network while it waits on the outcome of the government's second phase of the rural broadband initiative.

Chorus shares fell 1 percent to $4, while Spark stock slipped 0.6 percent to $3.63.

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