Commerce Commission seeks submissions on deregulating selected Schedule 1 teleco…

The Commerce Commission today released the preliminary findings of its five yearly review of whether to investigate deregulating selected services in Schedule 1 of the Telecommunications Act 2001 (the Act).

The Commission’s preliminary view is that there are reasonable grounds to investigate removing Spark’s resale services from Schedule 1. The Commission believes all other services in Schedule 1 should remain.

Currently there are three Spark resale services in Schedule 1 of the Act:

• local phone service
• exchange-based calling services and value-added services
• individual services that Spark sells in bundles.

The above resale services, which were originally introduced in 2001 and amended in 2011, have enabled retail service providers (RSPs) to offer retail fixed-line phone services without having to invest in their own infrastructure.

Telecommunications Commissioner, Dr Stephen Gale said, “Wholesale services including Chorus’ UBA and UFB-based wholesale services are becoming widely available and appear to compete with Spark’s resale services. Our preliminary view is that due to the increasing availability of these types of competing wholesale services, the importance of resale access has diminished since our review in 2011.”

“We consider that the other regulated services should stay in Schedule 1 of the Act, because they remain important wholesale inputs that support the supply of vibrant and competitive retail voice and broadband services,” Dr Gale said.

You can read the draft decision here. Submissions can be sent to telco@comcom.govt.nz no later than 5pm, 23 May 2016.

Background

Schedule 1

Schedule 1 of the Act contains the regulated wholesale services. Each of the wholesale services that are the subject of this review is used by retail service providers to supply the most common retail telecommunications services to end-users. As markets evolve, new retail services are developed and wholesale service providers can face increased competition, to an extent that it may no longer be necessary to mandate access to a service through Schedule 1. To this end, the Commission is obligated to periodically consider, under clause 1(3) of Schedule 3 of the Act, whether there are reasonable grounds for commencing an investigation into whether the service should be omitted from Schedule 1.

The Commission reviews each service at least every five years by assessing whether competition may have developed to such an extent that continued regulation is no longer needed to promote competition in telecommunications markets for the long-term benefit of end-users.

The three Spark’s resale services in Schedule 1 of the Act which we consider there are reasonable grounds to investigate removing are:

• local access and calling service offered by means of fixed telecommunications network
• retail services offered by means of a fixed telecommunications network
• retail services offered by means of a fixed telecommunications network as part of a bundle of retail services.

The services that we consider should remain in Schedule 1 of the Act are:

• interconnection with a fixed Public Switched Telephone Network (PSTN)
• Chorus’ unbundled bitstream access (UBA)
• Chorus’ unbundled bitstream access backhaul
• Chorus’ unbundled copper local loop (UCLL)
• Chorus’ unbundled copper local loop network co-location
• Chorus’ unbundled copper local loop network backhaul (distribution cabinet to telephone exchange)
• Chorus’ unbundled copper local loop network backhaul (telephone exchange to interconnect point)
• Chorus’ unbundled copper low frequency service (UCLFS)
• local telephone number portability service
• cellular telephone number portability service.

Amendment of the description of existing regulated services.

A separate process would need to be undertaken to amend the description of existing regulated services to reflect technological developments. The Commission welcome views on this issue as part of the submission process.