Joyce gives up on UFB regulatory holiday

Joyce gives up on UFB regulatory holiday; unbundling restriction remains

By Paul McBeth

May 18 (BusinessDesk) – Communications Minister Steven Joyce has abandoned plans for a decade-long regulatory holiday for fibre companies in the government’s ultra-fast broadband rollout while keeping intact a restriction on unbundling.

Just two days after Parliament’s Finance and Expenditure Committee recommended the Telecommunications (TSO, Broadband and Other Matters) Amendment Bill be passed with the forbearance period, Joyce decided to keep Commerce Commission wholesale pricing oversight.

If the antitrust regulator sets prices, the government will wear the cost through private investors being given an extension on repaying co-investment. Still, the commission won’t have any recourse to push for unbundling the network to residential customers until 2020. That means fibre companies won’t have to offer rivals access to their base network at an equivalent cost during the period.

“While I think their concerns are more theoretical than real, given that pretty much everybody has been happy with the very competitive process announced by CFH (Crown Fibre Holdings) to date,” Joyce said in a statement. “We have been able to find an alternative solution which will give the infrastructure builders confidence to stay committed to their low capped prices.”

The proposed regulatory holiday raised the ire of most of the telecommunications industry when the bill was receiving oral submissions at select committee, and prompted minority views from the Labour, Green and Act parties criticising the legislation in the committee report.

Joyce said today’s changes came with Maori Party assistance, which the government needs to get the legislation passed.

“The Maori Party has taken a consistently positive view of the importance of ultra-fast broadband and the rural broadband initiative in lifting development for Maori and all New Zealanders,” he said.

The new contractual mechanisms giving private investors relief won’t apply if a local fibre company’s behaviour prompts regulatory changes.

The government will include statements in the legislation to make it explicit the commission and minister need to consider investment and innovation in new markets when considering price regulation.

(BusinessDesk)

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