Telecommunications Regulation in New Zealand

In May 2005, the New Zealand Government launched a Digital Strategy to signal their commitment to ensuring that New Zealanders were well serviced with world class telecommunications.

The program aimed to:

• Have NZ positioned in the top half of the OECD for broadband performance by 2010.
• Reach the top quartile by 2015

During the two years 2006-2008, broadband uptake has almost doubled, however NZ's relative position internationally has barely changed. For NZ to reach its goals will require a substantial increase in regulation and investment in New Zealand’s broadband infrastructure from all sectors.

The governing regulation is the Telecommunications Act 2001.

The legislative regime regulating the telecommunications industry was extensively changed with passing of the Telecommunications Amendment Act (No 2), December 2006.

Regulation

Central government intervened in the telecommunications sector through regulatory reform in an attempt to stimulate demand and demand aggregation.

On 3 May 2006, the Government announced a package of measures to address New Zealand's relatively poor broadband performance. Currently, however, New Zealand is in the bottom third of OECD countries for broadband performance, and that position is not likely to change without radical reform encouraging a more competitive provider market.

The NZ Government is attempting to encourage investment in alternative and emerging technologies, in four ways.

1. Reviews public sector investment in telecommunications infrastructure
2. Considers constraining Telecom's ability to reduce local prices solely in response to new competing infrastructure investment
3. Puts forward plans to develop a rural package, and an expansion of the Digital Strategy's broadband challenge.
4. Ensures competitive access to spectrum for new wireless applications

The package also aims to future-proof the whole regulatory system against what is a highly-dynamic sector by looking at a number of issues - including reviewing the Telecommunications Service Obligation (TSO), and looking at the desirability of separating Telecom.

Reforms of 2007

The regulatory reforms of 2007 have laid the platform for extending and accelerating broadband deployment in New Zealand, and address infrastructure gaps such as:

1. Extending fibre-to-the-node (FTTN) further - currently planned by Telecom
2. Improving the availability of very high speed services to businesses in large cities - urban fibre loops
3. Improving rural broadband infrastructure
4. Improving the country’s international connections

FTTN

Fibre to the home has challenging economics in the short to medium term, with 2012 being a more realistic date for deployment.

HS Broadband

With traditional models of telecommunications companies are challenged by the level of fibre investment required to lift our OECD ranking, just establishing high speed broadband to all New Zealanders is proving difficult enough.

• Towns > 10,000 residents [76% of telephone lines] will have access to broadband at speeds of at least 20Mbps
• 90% of New Zealand’s lines will have access to broadband at speeds of at least 10 mbps

The Telecommunications Amendment Act 2006 attempted to foster more innovative approaches to this challenge by establishing local loop unbundling [LLU] and setting the basis for operational separation of Telecom New Zealand.

Naked DSL [without a phone service] is also being promoted.

Environmental

Four proposed National Environment Standards for telecommunications facilities will establish national standards and certainty around permitted activity within the Resource Management Act. This relates to:

• Installation of cabinets in road reserve- with specified noise limits
• Limitations on height and size for the installation of masts and antennas on existing structures in road reserve
• Activities that emit radio-frequency fields - such as mobile phone transmitters.

Later in 2008 the Government plans to introduce the Utilities Access Amendment Bill which will clarify access to motorways or rail corridors for infrastructure building.

Spectrum

The recent radio spectrum auction was critical to ensuring that mobile and fixed wireless services are available to extend broadband coverage, especially in rural areas.

The Government has been aggregating its own demand for broadband through the KAREN network and the Government Shared Network [GSN].

New Zealand’s international connections are also under review.

A key element of the Governments strategy is to promote increased levels of investment in telecommunications infrastructure.

A focus on the needs of rural users, and their importance to New Zealand will need a mix of technologies to resolve rural broadband issues. This will require cooperation between different telecommunications providers over sharing infrastructure costs. This includes the use of common facilities such as towers for wireless and cell phone services. These initiatives will be supported financially by the government.

The government is also currently facilitating the preparation of a broadband resource kit. The kit will provide best practice guidance for promoting broadband investment and the effective utilisation of broadband.

Local Government Participation

Local government is also being encouraged to develop effective relationships with the telecommunications service providers.

The role of local government is crucial in four broad areas:

Demand aggregation - assist investment decision-making encouraging the use of enhanced infrastructures. Councils can articulate community demands so that service providers can justify investment decisions.

Council procurement policies - articulate and coordinate requirements to influence how telecommunications services are provided in their communities.

Direct and indirect investment- The Broadband Challenge projects rely on involvement of local authorities in engaging with community groups with an interest in broadband developments. L

Regulatory powers - aligning consenting processes to broadband strategy
and ensuring as far as possible regulatory barriers, compliance and transaction costs are minimised.

Minimising delays in the provision of resource consent reduces the cost of installing a cell tower by up to one third, through reduced legal costs (RMA issues), location costs (rent, rates) and power supply.

Telecommunications companies are frustrated by having to make applications for the same or similar infrastructure [laying fibre or erecting or co-locating mobile towers]. Developing more consistent standards and approaches would alleviate this blockade.

Digital Strategy Update

Digital Strategy 2.0 is not central government focused. It relies heavily on participation from the private sector and community to share leadership and take some ownership.

Beyond Broadband the focus is on Intelligent Communities, creating a culture of use for technology and embracing new business opportunities for the digital age. All members of the community must become equipped to take full advantage of opportunities the digital age affords.

For Updates on NZ ICT

Forums and Bodies

TUANZ - Telecommunications User Association of NZ - non-profit organisation promoting the needs of end-users of telecommunications in New Zealand.

The Telecommunications Carriers Forum - facilitates co-operation amongst telecommunications carriers in New Zealand.

NZ Commerce Commision - enforces legislation that promotes competition in New Zealand markets and prohibits misleading and deceptive conduct by traders. The Commission also enforces a number of pieces of legislation specific to the telecommunications, dairy and electricity industries.

Ministry of Commerce - Communications Division - responsible for advising the Government on the regulatory policy for the telecommunications sector.

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