Telcos try last ditch attempt to change broadband bill

Contractors laying fibre optic cabling in Havelock North. Photo / Hawkes Bay Today

Opponents of the proposed 'regulatory holiday' for ultra-fast broadband providers have put up a late option for involving the competition watchdog, the Commerce Commission, in UFB price monitoring.

The Telecommunications (TSO, Broadband and Other Matters) Amendment Bill includes a 10-year window of "pricing certainty", which is intended to give would-be investors in UFB confidence to invest their own money alongside the government's $1.35 billion revolving fund for the network roll-out.

With the national urban UFB roll-out expected to cost as much as $6 billion in total, Telecommunications Minister Steven Joyce has defended the regulatory holiday as essential to ensuring private sector investors get involved.

However, with Telecom Corp. looking increasingly likely to win the lion's share of the UFB subsidy, a group of telcos and service providers led by Telecom competitor TelstraClear is proposing changes that would keep the Commerce Commission involved in pricing oversight.

The proposal is to allow UFB service providers to seek Australian-style Special Access Undertakings, which would see the commission approve proposed pricing for UFB services, rather than being unable to intervene.

"It seems to work well in Australia," said Paul Brislen, chief executive of the Telecommunications Users Association of New Zealand.

While there would be no obligation to seek an SAU for a particular service, failure to do so would invite public backlash.

"It puts pressure on the telcos from a public perception point of view," Brislen told BusinessDesk.

And with the Labour Party promising to review the regulatory holiday, if elected, the proposals for regulatory holidays were not achieving the regulatory certainty that UFB service providers said they needed anyway.

Public submissions on the Bill were heard in recent weeks, and the select committee considering the new regime is due to report back to Parliament by May 16, making the process for consideration of the late proposal unclear.

"We're trying to offer some alternatives," said Brislen, citing indications from Telecom that it could live without the regulatory holiday provisions, which may become politically contentious.

"It's a long bow to draw at this stage, but if we offer something to the select committee that gives them the same outcome, I would trust that the committee would refer that back with those changes included."

It also gave Act and the Maori Party options as they considered their support for the government's bill.

The SAU system allows a telco to give an undertaking to the competition authorities for pricing and access on services to third parties, where the service is not already subject to access regulation.

"Regulatory certainty could be provided to the access provider by ensuring that an approved SAU prevails over any subsequent attempt to regulate prices," says a TUANZ statement. "At the same time, however, regulatory oversight of prices can be maintained by allowing the Commission to review and approve price terms in a SAU."