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Who will pay for the user voice in fibre regulation?

Sarah Putt, Contributor. 19 June 2018, 8:55 am

With new telco legislation wending its way through Parliament, the Commerce Commission is suggesting a new levy could fund a consumer panel, as well as its own work, when the Telecommunications (New Regulatory Framework) Bill is passed into law.

As you might expect, the user groups are in favour of a consumer panel but the telco industry is not so keen on funding it.

Submissions to the Commission's paper - in which it is proposed that the sector contribute $12 million over three years to establish the new regulatory regime for fibre networks, and an additional $1 million for a consumer panel - are now on its website.

"Consumer NZ, TUANZ and InternetNZ strongly supported the additional funding for consumer representative groups or panels, but most of the industry did not wish to pay for it," writes Telecommunications Commissioner Stephen Gale in a letter to the Ministry of Business, Innovation and Employment that precedes the 14 submissions.

"A strong consumer voice in our processes could add value to the decision-making process, by improving the level of information which we use to make decisions. Ultimately the cost/quality trade-off is as much a policy question as a process one. If you were minded to fund the establishment of consumer representative groups or panels, then we would support this decision and work to ensure its effective implementation," Gale writes.

The Commission had proposed the funding so that consumer representative groups could take an active part in the consultation process. It noted that this is an approach taken in Australia and the UK, citing the Consumer Challenge Panel run by the Australian Energy Regulator, which exists to "improve the quality of regulatory determinations."

Meanwhile, the proposal to spend an additional $12 million on implementing the new fibre regime met with more favourable reaction. Gale writes "no one took issue with our proposal", and that Chorus claimed the cost was in line with its expectations. Although there were industry players who thought the work could, in part, be funded by the existing levy.

"Some retail service providers and the NZ Telecommunications Forum questioned whether it was necessary for the new work to be wholly financed through new funding as opposed to re-prioritising existing work. Submitters queried whether we could temporarily use a portion of the existing $6m annual telecommunications appropriation for implementation of the new fibre regime," Gale writes.

But, the Commission expects its baseline funding to be fully committed over the next three years to existing work programmes and the idea behind "ringfencing" fresh funding to develop the new fibre regime is to ensure this work doesn't interfere with current activities.

"This approach was supported by some submitters, such as Trustpower, who strongly supported a separate fibre team and Vocus, who emphasised the importance of not taking our "eye off the ball" with other important telecommunications work," Gale writes.

The Commission proposes to spend the additional funding on setting up a team to work on a new fibre regulatory regime over three years. It would provide for an additional 15 fulltime employees, including three economists, two legal staff and six analytical staff members such as chief advisers and analysts.

You can read Gale's full letter, the original report and the 14 submissions here.


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