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2010/TEL42/PLEN/013
Agenda Item: 5
New Zealand Policy and Regulatory Update
Purpose: Information
Submitted by: New Zealand
/ 42nd Telecommunications and Information Working Group Meeting - Plenary Session Bandar Seri Begawan, Brunei Darussalam5-7 August 2010
APEC Telecommunications and Information Working Group, 42nd Meeting, August 2010
NEW ZEALAND POLICY AND REGULATORY UPDATE
This report covers significant activities and issues from March 2010 to August 2010.
TELECOMMUNICATIONS
The Availability of Regulated Services
Since January 2010, the New Zealand Commerce Commission (“the Commission”) has:
· released a final report on its investigation into mobile termination access services.
· continued preparing a draft report on its investigation into the resale of the fixed incumbent operator’s retail services.
Mobile Termination Investigation
In June 2010, the Commerce Commission released its final report on its investigation into whether mobile termination access services (MTAS) should be regulated. The investigation concerns mobile-to-mobile voice termination, fixed-to-mobile voice termination and short-message-service termination. In its report, the Commission recommended that the Minister regulate MTAS.
The Minister is currently considering the Commission’s recommendation. If he accepts it, then the Commission will begin a process designed to set the terms on which access seekers can demand supply of MTAS from New Zealand mobile operators.
The Minister’s decision is expected in August 2010.
Please refer to:
http://www.comcom.govt.nz/mobiletomobiletermination
Resale of incumbent’s retail services
Resale services occur when the fixed incumbent operator Telecom New Zealand provides its retail services on a wholesale basis to other telecommunications service providers.
Retail services are “designated” access services under subpart 1 of Part 2 of Schedule 1 of the Telecommunications Act 2001, meaning that the price and non-price terms of their supply are subject to regulation. The retail services which are currently resold by Telecom are:
Ø Retail services offered by means of Telecom's fixed telecommunications network (FTN);
Ø Residential local access and calling services offered by means of Telecom's FTN;
Ø Bundle of retail services offered by means of Telecom's FTN; and
Ø Retail services offered by means of Telecom's FTN as part of bundle of retail services.
In addition to undertaking an investigation into whether or not resale services should be omitted from Schedule 1 (and so become “deregulated”), the Commission will also consider whether the service descriptions of the resale services should be amended (if resale services are not omitted from Schedule 1).
A draft report is expected in August 2010 and a final report and recommendation to the Minister in November 2010.
International mobile roaming
In May 2010, the Minister responsible for telecommunications in New Zealand and his counterpart in Australia released a joint discussion document on international mobile roaming between New Zealand and Australia. The discussion document came to the preliminary conclusion that pricing transparency was low and that prices were high.
A number of submissions were received from industry players, consumer groups, and members of the public. Mobile operators have also supplied traffic and revenue data. All this information will be used to test the preliminary conclusions of the discussion document and decide whether it is appropriate to continue to a full market analysis.
This decision should be made by the end of 2010. If a full market analysis takes place, it will likely take the form of a consultation in late Q1 2010.
TSO/KSO
The Telecommunications Service Obligations (TSO) for local telephone service are being reviewed to ensure that the obligations reflect the increasing consumer expectations for telecommunications access services and to ensure the wider population can benefit from technology enhancements.
The TSO Review has now been completed and key policy decisions were agreed by Cabinet in March 2010 following public consultation on a discussion document released on 29 September 2009. The key policy decisions were that:
Ø all the current Local Residential Telephone Service Obligations remain relevant and should be retained;
Ø the legislative framework which provides for the cross-industry funding of TSO instruments should be amended to provide for a fairer allocation of cross-subsidies and to consolidate industry payments into a single telecommunications development levy (the TDL);
Ø the TDL should, in addition to funding TSO costs, also provide for the collection of payments from the industry to support the funding requirements of the Rural Broadband Initiative and upgrades to the emergency services calling system; and
Ø the TDL should be set at $50 million per annum until 2015/16 and $10 million per annum thereafter.
A Bill to amend the Telecommunications Act 2001 is currently being drafted to implement these policy decisions and is expected to be ready for introduction to the Parliament in 2010.
Broadband Initiative
UFB Initiative
The current government has committed to contributing an investment of up to $1.5 billion alongside additional private sector investment to accelerate the roll-out of ultrafast broadband to 75 percent of New Zealanders.
This investment is subject to five key principles:
Ø That this investment does not line the pockets of or give undue advantage to existing broadband network providers.
Ø That the network is open-access so that many service providers can compete to provide broadband services over it.
Ø That excessive duplication of the network is avoided.
Ø That everyday New Zealanders get affordable world-class broadband services.
Ø That this public-private partnership remains focused on New Zealand’s economic future and not the legacy assets of our economic past.
On 16 September 2009, the finalised investment proposal was published. The government established a Crown-owned investment company (“Crown Fibre Holdings or CFH”) in December 2009 to drive the government’s investment. Following an initial round of bids received in January 2010, CHF released a revised request for proposals on 2 July 2010.
CFH will invest alongside private sector co-investors in regional or national fibre companies that will deploy and provide access to fibre optic network infrastructure in the 33 towns and cities covered by the initiative. The fibre companies will only operate at the wholesale level, providing access to dark fibre and certain ‘layer 2’ wholesale services. They will be prohibited from selling retail services (and investment partners that own or operate retail operations will not be able to have majority voting control in the regional fibre companies).
Until 31 December 2019, there is to be a period of regulatory forbearance from Commerce Commission intervention under the Telecommunications Act. However:
Ø Fibre companies will provide open access undertakings in a Deed of Undertaking to the Government, to be enforced by the Commerce Commission.
Ø Prices for the fibre access services will be those set through commercial negotiation, with CFH, following the competitive tender process.
Ø The fibre companies will provide information, as required by legislation, with the Commerce Commission to have an ongoing monitoring role.
CFH will operate an open, transparent and contestable process to select local partners, with selection based on:
Ø The amount of additional fibre coverage being proposed.
Ø The proposed capital structure.
Ø Commercial viability of the proposal.
Ø Consistency with government objectives.
Ø Track-record of the partner, amongst other factors.
CFH will receive final responses to the revised Invitation to Participate on 2 August 2010.
Rural Broadband Initiative
The Government is implementing a $300m rural broadband initiative to:
Ø connect 97 percent of schools to fibre, enabling speeds of at least 100 Mbps, with the remaining 3 percent to achieve speeds of at least 10 Mbps; and
Ø improve coverage of fast broadband services so that 97 percent of New Zealand households and enterprises are able to access broadband services of 5 Mbps or better, with the remaining 3 percent to achieve speeds of at least 1 Mbps.
The Government has received 39 expressions of interests for the Rural Broadband Initiative. Interest has come from infrastructure companies from New Zealand and abroad, and includes nine substantial expressions of interest covering the entire country. A Request for Proposals will be issued in August.
Please refer to:
www.med.govt.nz/rural-broadband
Facilitating the deployment of broadband infrastructure
The Government is exploring complementary measures to facilitate the deployment of broadband infrastructure and reduce the costs of acquiring rights of access to land, deploying support structures and obtaining resource consents.
Submissions and Expressions of Interest have been received on a fibre deployment standards initiative being coordinated by the Ministry of Economic Development (MED), Crown Fibre Holdings Ltd and the Digital Auckland Working Party. The initiative will involve the development of nationwide standards of practice for fibre deployment, accompanied by pilot deployments around the country to test those standards at selected locations, to facilitate the roll-out of broadband infrastructure.
It is intended that the standards developed would ultimately be fed into the National Code of Practice for Utilities' Access to Transport Corridors (the ‘Utilities Code'), to be given regulatory status under the Utilities Access Act 2010. The MED's preliminary view is that nationwide standards of practice would:
· Enable the efficient deployment of a range of non-traditional fibre installation techniques in New Zealand as a deployment option for the roll-out of fibre;
· Create consistent rules and processes to be applied by individual local authorities across the country; and
· Potentially reduce UFB and RBI roll-out costs and deployment timeframes.
Please refer to: www.med.govt.nz/facilitating-broadband
Reform of the Resource Management Act and related legislation
The Resource Management Act 1991 (the “RMA”) sets out the framework within which local councils develop district plans. District plans determine which activities require resource consent and which do not. As such, they directly impact the roll-out and maintenance of telecommunications networks.
The New Zealand government has launched a two-phase reform of the RMA. The first phase involved amending the RMA to streamline and simplify the current resource consent processes. This Act came into effect on 1 October 2009. The second, more long-term phase, will examine more complex issues inhibiting effective resource management, and may lead to further amendments to the RMA and other legislation, or non-legislative measures.
Apart from resource consent, those deploying or maintaining networks also require agreements (leases) with the relevant landowners. Where the land involved is a public transport corridor, such as a road, a motorway or a rail line, a network operator’s ability to obtain such agreement is guaranteed under certain legislative instruments. The government is seeking to reform these instruments to further reduce the costs and inefficiencies imposed on network operators when exercising their right of access to transport corridors.
RADIO SPECTRUM
The radio spectrum policy environment in New Zealand is delineated primarily by the Radiocommunications Act 1989 which, in addition to providing the framework for radio spectrum management, recognises New Zealand’s obligations to the worldwide radiocommunications community as a signatory to the International Telecommunication Union (ITU) constitution and convention. The Radiocommunications Regulations 2001 are subordinate to the Act.
New Zealand was the first economy to redefine radio spectrum in terms of property rights, and to assign it in a tradable form. Property rights to spectrum are, in general, assigned competitively under the Management Rights Regime (MRR), as either a band (management right) or as individual spectrum licences issue by the band manager.
Spectrum allocated for other commercial purposes and for use in the ‘public interest’ by, for example, a recent allocation of VHF and UHF spectrum for public protection and disaster relief services, is normally assigned administratively under the Radio Licensing Regime (RLR).
Low power, ubiquitous devices – for example, garage door-openers and wireless LANs – and community services – for example, amateur radio and CB radio – are generally assigned as shared ‘public park’ spectrum using General User Licences (GULs), in a similar manner to the allocation of licence-exempt spectrum in other countries.
A ‘managed park’ has also been created in 2010 as a middle ground option between nation-wide spectrum rights with exclusive access and General User Licensed bands with open public park access. Managed Spectrum Parks (MSP) are intended to allow flexible access for a selected number of users on a shared basis for local and regional deployment of wireless infrastructure. It is intended to be, as far as possible, self-managed by the users. Users are required to coordinate with each other to ensure quality of service otherwise not achievable.
Digital Television Services
Free-to-air DTH (digital satellite television) services were launched in 2007 under the ‘Freeview’ brand using leased capacity on the Singtel Optus D1 satellite. Free-to-air DTT (digital terrestrial television) transmissions, covering 75% of New Zealand’s population, commenced in April 2008. The satellite and terrestrial services are complementary, to ensure complete coverage of the NZ population. Plans for the new service were developed by government agencies and Freeview, a consortium of New Zealand's free-to-air broadcasters, including Television New Zealand, Mediaworks (formerly Canwest), Maori TV, Trackside and Radio New Zealand.
The government provided some funding to assist with establishment of Freeview, but the bulk of costs are met by broadcasters. Broadcasters also have free access to radio spectrum for digital transmissions until digital switch-over. Freeview will operate on a non-profit basis during this period, with open access for new services.
The government has commenced a process for determining the date of digital switch-over, and for re-allocating spectrum in the television bands to enable use of the ‘digital dividend’. A firm date for digital switch-over will be set in 2012 or whenever 75% of households are able to receive digital transmissions, whichever comes first.
Good viewer uptake continues, with around 70% of households taking up digital services (including pay-TV) by mid 2010.
The digital switch-over policy is detailed on the Ministry of Economic Development's website at:
http://www.rsm.govt.nz/cms/policy-and-planning/current-projects/digital-futures-planning-for-digital-television-and-new-uses
New Zealand Satellite Opportunities
In November 2004 a process was announced for allowing commercial satellite operators to access New Zealand satellite reservations and filings with the ITU. A specific application was received for operation at 158 deg East and a contract signed with the applicant.
The applicant is currently undertaking commercial and coordination arrangements.