Watchdog probes UFB fibre barriers

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The Commerce Commission wants to look at potential barriers to end-user uptake of ultra-fast broadband, and is asking for input on the draft terms of reference of its investigation.

The antitrust regulator wants to look at any demand-side impediments to people accessing high-speed internet as the government's Crown Fibre Holdings gets closer to doling out $1.35 billion to the bidders of the State-subsidised broadband network.

The commission wants to look at the drivers of broadband uptake in other jurisdictions, any barriers to consumer buy-in such as peering (the voluntary interconnection of separate networks), internet protocol interconnection, data caps and content arrangements.

It's also proposing to look at whether network neutrality, where all data is treated equally regardless of source or destination, is an issue in New Zealand. Finally, it wants to analyse what steps might be needed to promote effective competition.

"Our aim is to promote competition in telecommunications markets for the long-term benefit of end-users of telecommunications services in New Zealand," Telecommunications Commissioner Ross Patterson said in a statement. "The study will result in a report which will identify any factors which may inhibit the uptake of ultra-fast broadband services."

The probe comes as Parliament's Finance and Expenditure Committee looks at legislation enabling Telecom Corp. to split itself into two separate companies, allowing it to participate in the government's broadband network.

Communications Minister Steven Joyce's supplementary order paper, which included the amendments dealing with the ultra-fast broadband initiative and sister rural broadband, was roundly criticised by most industry submissions who, among other things, were unhappy with the proposed regulatory holiday offered to the winning bidders.

The Telecommunications (TSO, Broadband and Other Matters) Bill and SOP were intended to ensure Telecom can't build a dominant position in the telecommunications environment that will emerge as fibre-optic cable and wireless services gradually replace today's copper-based telephone networks. Telecom has made it to the priority list to win a chunk of government funding, along with Vector and some of the Regional Fibre Group's members.

The final terms of reference are expected to be completed this month, with a discussion paper scheduled for June and the final report in December.