Minister wipes regulation on broadband resale, retail bundles like Telecom's Total Home

Communications Minister Steven Joyce has accepted the Commerce Commission's 16 December 2010 Resale Service Report recommendations to remove resale regulation of retail broadband and data services, and resale regulation of bundled retail services.

In its report, the commission named Telecom's Total Home package - which bundles home broadband with local calls and tolls - is given as an example of a service that should be deregulated given current "low uptake" and commercial alternatives for customers in many areas.

Tuanz: minister doing the right thing
Telecommunications Users Association chief executiver Paul Brislen backed Mr Joyce's move.

"Tuanz is happy that the commission is looking at reducing regulation where it's no longer needed as well as introducing regulation where it is.

"It's important to get the balance right so as to encourage investment without adding undue red tape where it's no longer relevant and that's what's happening here." 

Orcon not so sure
Orcon chief executive Scott Bartlett was more ambivalent. 

"It's not overly relevant to Orcon as we don't purchase a lot of resale services," Mr Bartlett said. "However, it is removing the first run on the ladder of investment. Apparently the ladder of investment is no longer considered important in New Zealand."

Telecom: copper rules for a fibre world
Telecom has long being pushing for lighter regulation in light of the government's fibre-based, $1.35 billion ultrafast broadband (UFB) project, and immediately issued a statement welcoming the commission's report.

Chief executive Paul Reynolds has asserted many times that the Telecommunications Act, which regulates Telecom's operation, was written for a copper world, and is impractical and expensive for his company as the transition to fibre beckons.

The Telecommunications Act 2001 (the Act) requires Telecom New Zealand to offer a range of retail fixed network telecommunications services to access seekers (that is, rivals) on regulated terms and conditions, for resale to end users. Some common examples are resale of retail broadband services, resale of retail residential telephone service and associated value added services such call waiting, and call minder.

“Regulation of these retail services has been scaled back because competitive service providers are now using regulated wholesale access services, such as bitstream, to provide their own retail broadband and data service offerings to end users throughout New Zealand,” Mr Joyce said.

The Commerce Commission investigation was prompted by a February 2009 request from Telecom that it consider changes to the regulation of resale services.

Under section 19 of the Telecommunications Act 2001 (the Act) the Minister is required to make the decision that best gives, or is likely to best give, effect to the purpose of Part 2 of the Act – that is, to promote competition for the long-term benefit of end-users of telecommunications services.

Mr Joyce says he considers that accepting the Commission's Resale Service Report recommendations and the subsequent clarification of the single service resale recommendation, meets this test.

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