Commerce Commission to review regulated broadband non-price terms

MIL OSI – Source: Commerce Commission – Commerce Commission to review regulated broadband non-price terms The Commerce Commission has today announced it will formally review the non-price terms of the Unbundled Bitstream Access (UBA) Standard Terms Determination (STD) under the Telecommunications Act. UBA is one method of supplying broadband services – allowing retail telecommunications companies to provide internet services over Chorus’ copper network without the need to physically install their own equipment. The UBA STD sets the baseline price, general terms and service description that Chorus must offer to retail companies. Telecommunications Commissioner Dr Stephen Gale said the UBA STD was first released in 2007, before Chorus existed, and the non-price terms needed to be properly reviewed to assess whether they are still fit for purpose in today’s environment. “Last year Chorus announced it intended to introduce new commercial UBA services and make changes to the delivery of regulated internet services, including withdrawing the VDSL service and making changes that may limit internet performance at peak times. Spark requested we conduct an investigation into whether Chorus’ proposal was in breach of the STD. As part of the investigation we commissioned external legal advice that expressed concerns it could,” Dr Gale said. “While the STD is workable, we recognise there is some uncertainty over its requirements and the process for launching new commercial services.  With Chorus putting a hold on its proposed changes and the statutory freeze on reviewing the STD now expired, the time is right to undertake this work.” The Commission has closed its investigation into Chorus’ proposed changes to its regulated network and considers any outstanding issues identified will be dealt with in the review. The UBA STD review will run parallel but separate to the current final pricing process for Chorus’ wholesale services. At this stage the Commission expects a draft decision for this review will be released for consultation shortly after the final pricing determination is made later this year.

Background

Under the current UBA STD, Chorus is able to offer commercial UBA services and variants at different prices to the regulated UBA service. However, before doing so, Chorus must provide notice to the Commission under clause 10 of the UBA STD General Terms. On 14 May 2014, Chorus announced that it intended to introduce new commercial UBA services (Boost variants).  As part of the introduction of the Boost variants, Chorus also proposed two changes to the regulated UBA service:

• capping aggregate throughput at the handover point; and
• withdrawal of VDSL as a regulated UBA service.

After receiving a complaint from Telecom (now Spark) that Chorus’ proposed changes to the regulated UBA service breached the UBA STD, the Commission commenced an investigation under section 156O of the Telecommunications Act on 22 July 2014. The investigation was suspended on 16 October 2014 after Chorus put the proposed changes to the regulated UBA service on hold, including in particular, any constraints on the regulated service and the withdrawal of the current regulated VDSL service. Chorus has made a commitment that they will not apply traffic management before the end of September this year. As a result of the issues identified during the investigation, the Commission published a consultation paper seeking views from industry on whether it should undertake a review of the UBA STD under section 30R of the Telecommunications Act. The majority of the seven submissions received supported a review. Section 76(a) of the Telecommunications Amendment Act 2011 provided that section 30R of the Act does not apply in relation to Chorus’ UBA service (except as provided in sub-Section 73 and 77) for the period ending three years after separation date. This prevented a review of this service until 1 December 2014. As the statutory freeze on reviewing the UBA STD has expired the Commission is now able to conduct this review. While the review is not expected to affect the UBA price, the Commission will consider if any ‘change in circumstances’ to the UBA STD should be reflected in a change in price, as required by 30P(1)(a)(ii) of the Act. –]]>