ComCom has changed its position on the regulation of four services since its draft decision, in direct response to feedback from the industry
ComCom will undertake an in-depth review to determine whether to roll back the rules on four fibre services
On 19 December 2024, New Zealand’s Commerce Commission (ComCom) published its final decision on whether there is scope to launch a deregulation review of one or more fibre fixed line access services (FFLAS). It has confirmed that it will investigate whether regulation should still apply to four of the seven fibre services it currently regulates. These services are:
Voice and transport services provided in all fibre areas; and
Point-to-point and co-location and interconnected services provided in areas not controlled by Chorus, the country’s largest fibre provider.
Under the Telecommunications Act 2001, ComCom must consider whether there are reasonable grounds to start a deregulation review for any of the seven services before each regulatory period (the current one – ‘Price Quality Period 2’ (PQP2) – began on 1 January 2025). The decision therefore marks the end of the first step in a two-stage process, whereby ComCom will now undertake a detailed review of the selected four services. It will soon develop a deregulation review plan and has committed to providing further details on the timing of the review during 2025.
The draft decision did not see grounds for considering deregulation
While the regulator considers that rules should remain in place for New Zealand’s “core [wholesale] fibre broadband service” (i.e. bistream), there is competition in other fibre services and from smaller providers – Enable, North Power and Tuatahi – that could make deregulation appropriate. In reaching a final decision, ComCom has taken into account feedback from eight stakeholders on its draft decision from August 2024, which outlined a preliminary view that it is too early to consider potential deregulation. At the time, ComCom raised concerns that if regulation was removed prematurely, fibre providers would be able to increase prices or reduce quality (or both) to maximise profits at the expense of consumers. While its thinking has clearly been influenced by responses from stakeholders, it has not decided to deregulate at this stage, but only accepted that there are grounds for considering doing so. For deregulation to take place, the regulator would need to be satisfied that there is sufficient competition to protect the long-term interests of consumers.
FWA and satellite don’t yet provide a sufficient competitive constraint on fibre services
ComCom will continue to monitor the market and will start deregulatory reviews for any of the other three fibre services if there is a case for it before the next formal statutory review. In line with its draft decision, the regulator does not consider there is enough of a competitive constraint on fibre from fixed wireless access (FWA) and other alternative technologies, e.g. satellite, to warrant exploring the deregulation of bitstream. In ComCom’s view, 4G FWA “just doesn’t get close enough” to fibre in terms of its performance capabilities (e.g. speed, latency); however, the regulator recognises that this could change, potentially quickly, with the increasing rollout and adoption of 5G FWA services, and will be following developments in this space closely. ComCom is separately investigating the deregulation of copper services in rural areas and mobile termination in light of changes in the industry and competitive landscape. Its FFLAS decision also follows the regulator’s announcement of new maximum review and quality standards for Chorus over PQP2, which aim to provide value for consumers in New Zealand while promoting continued investment in essential fibre infrastructure.
