Commission releases draft decision on service levels of Chorus UBA

The Commerce Commission has today released the draft decision in its review of the non-price features of the Unbundled Bitstream Access (UBA) service.

The purpose of this review is to clarify the service requirements in the Standard Terms Determination (STD) for UBA to ensure that the regulated service remains suitable for a range of general internet uses.

Regulated UBA provides one way of supplying broadband services, allowing retail telecommunications companies to provide internet services over Chorus’ local copper network without the need to install their own equipment in exchanges. The UBA STD sets the terms of the service that Chorus must offer to retail companies.

Telecommunications Commissioner Dr Stephen Gale said the UBA STD was first released in 2007 and the Commission is undertaking this review to ensure it remains fit for purpose.

“During our review, submitters generally agreed that the UBA STD should be updated to capture what Chorus is providing today, and continue to support consumer demand,” Dr Gale said.

“In simple terms our draft decision is that Chorus should upgrade its capacity as needs grow so that retail telecommunications companies and consumers can continue to make best use of the capacity of the copper lines. This approach will enable retailers to continue to offer competitive differentiated broadband products over copper lines. Although the UFB footprint is expanding rapidly, the copper network will remain an important delivery platform for a significant portion of the population in the near future.”

The Commission’s current view is to exempt around 19,000 lines in Chorus’ remote legacy ATM network from the proposed service standards, and assess the need of another section 30R review when it is clear where the second phase of rural broadband initiative funding will be targeted. This initiative is part of the Government’s connectivity targets for broadband in New Zealand.

“We will require Chorus to report on the congestion levels on the UBA network and its plans to relieve the congestion where the network is nearing capacity. This should provide useful clarity for retailers and consumers.”

A copy of the draft decision can be found on the Commission’s website.

Submissions on the draft decision close at 5pm on 30 November. Cross-submissions must be received by 5pm on 15 December. The Commission anticipates releasing its final decision in March 2017.

Background

Under the current UBA STD, Chorus must offer the regulated UBA service at the regulated price but is able (subject to notifying the Commission) to offer commercial variants of UBA services at different prices.

On 14 May 2014, Chorus announced that it intended to introduce new commercial UBA services (Boost variants). As part of the introduction of the Boost variants, Chorus also proposed two changes to the regulated UBA service:

• capping aggregate throughput at the handover point; and
• withdrawing VDSL as a regulated UBA service.

After receiving a complaint from Telecom (now Spark) – that Chorus’ proposed changes to the regulated UBA service breached the UBA STD – the Commission commenced an investigation under section 156O of the Telecommunications Act on 22 July 2014.

The investigation was suspended after Chorus put the proposed changes to the regulated UBA service on hold, including in particular, any constraints on the regulated service and the withdrawal of the VDSL service.

As a result of the issues identified during the investigation, the Commission published a consultation paper seeking views from the interested parties on whether it should undertake a review of the UBA STD under section 30R of the Telecommunications Act. The majority of the seven submissions received supported a review.

The Commission then announced that it would formally review the non-price terms of the UBA STD under the Telecommunications Act. At the same time, the Commission closed its investigation into Chorus’ proposed changes to the regulated UBA service.

The Commission has set updated prices for Chorus’ UBA service, based on the TLSRIC pricing principle. The TSLRIC-based price compensates Chorus on the basis of a UBA service dimensioned to meet existing and expected demand by end-users.

Earlier this year the Commission released a consultation document on the UBA STD. This paper sought views on the key issues the Commission intended to address in the review, as well as the proposed process.

For further information see the UBA page.