ComCom recommends deregulating fibre landline voice service
The Commerce Commission has recommended deregulating the wholesale fibre landline voice service after finding it has had little uptake and that other ways of making voice calls are more popular.
Telecommunications Commissioner Tristan Gilbertson says the Voice Fibre Service was introduced as part of the 2018 fibre regulatory framework to manage the transition from copper to fibre networks.
“At the time, landline services were still widely used, and regulation ensured there was a fibre-based option that could support that demand as Kiwis moved off copper,” Mr Gilbertson says.
“However, our analysis shows that very few Kiwis ended up using the regulated service, because demand shifted away from landline calling towards the use of mobile and internet-based alternatives,” Mr Gilbertson says.
Landline use has declined by over 70% in the last decade. Most Kiwis now use a mobile for voice calls at home. Kiwis who still have a landline typically receive it as part of their broadband package using internet-based technology (VoIP).
“This rapid shift in consumer behaviour and the preference for alternative ways of making voice calls from home has reduced the need for the regulated service – which only accounts for 0.36% of fibre connections,” Mr Gilbertson says.
“Regulation should remain in place only where it continues to benefit consumers, and that’s no longer the case here. With very low uptake, and strong competition from alternatives, it’s appropriate for regulation to step back,” Mr Gilbertson says.
“Deregulation does not mean landlines will disappear. Retail providers will continue to offer landline-style services over broadband to customers who want them. This recommendation simply recognises that the regulated wholesale input is no longer needed for this to happen,” Mr Gilbertson says.
The Commission’s recommendation has been provided to the Minister for Media and Communications who will decide whether to accept it.
Background
What is the service?
- Voice Fibre Fixed Line Access Services (Voice FFLAS) is a regulated wholesale input (using the ATA port on the Optical Network Terminal) that allows retail providers to supply traditional landline-style voice services over fibre networks.
Why was it regulated?
- The service was introduced as part of the 2018 fibre regulatory framework.
- At that time, landline voice services were still widely used, and regulation helped ensure consumers could continue to access similar services as networks transitioned from copper to fibre.
What is the Commission’s role?
- Under the Telecommunications Act, the Commission is required to periodically assess whether regulated fibre services continue to be necessary.
- The Commission’s role is to ensure regulation is applied only where it is needed to promote outcomes consistent with competitive markets and the long-term benefit of end-users.
- Where effective competition exists, and services are no longer widely used, regulation may no longer be necessary.
Related work
- The Commission is also reviewing the regulation of three other minor fibre services – Transport, Point-to-Point, and Interconnection – as part of its broader Fibre Fixed Line Access Services (FFLAS) deregulation programme.
- The Commission is not reviewing the core regulated fibre service – called the Bitstream service – that is used to provide broadband services to homes and business across the country.
- The Commission found that competition from alternative technologies is not sufficient for there to be any realistic question of deregulation of the Bitstream service.