Commission releases discussion document for statutory review of the UBA service
26 July 2012
The Commission today released a discussion document on its approach to completing a statutory review of the unbundled bitstream access (UBA) service.
The UBA service is a wholesale service provided by Chorus and used by other telecommunications companies to provide retail broadband services to their customers over the copper network.
The purpose of the review is to update the prices that will apply to the UBA service from 1 December 2014, and it is required by the 2011 amendments to the Telecommunications Act.
The discussion document outlines the Commission's proposed approach to completing the review, which requires benchmarking the UBA service price against the cost of the service in other countries.
This review is being conducted at the same time as the re-benchmarking review of the price of unbundled copper local loop (UCLL) services. As UCLL is a component of the UBA service, the final price of the UBA service will be the UCLL price plus the benchmarked UBA price.
Submissions on the discussion document are due on 24 August 2012. You can find a copy of the discussion document on the Commission's website at: www.comcom.govt.nz/uba-benchmarking-review
In June 2011 the Government instituted a number of changes to the telecommunications regime as part of its ultra-fast broadband initiative. Among these changes was a requirement that the Commission determine a new cost-based price for the UBA service to have effect from 1 December 2014. The Commission is required to make reasonable efforts to determine this new price by 1 December 2012.
Existing prices are calculated by subtracting a retail mark-up from the average retail price of services provided by Telecom. As Telecom and Chorus are separate companies, the 'retail minus' pricing approach is no long appropriate.
The new cost-based price is determined with reference to the cost of comparable services in other countries.
Unbundled copper local loop (UCLL) refers to the service that enables access to, and interconnection with, Chorus's copper local loop network. It allows telecommunications companies to supply voice and broadband services to retail customers using their own equipment over Chorus's local loop.