Macindoe TimTELECOMMUNICATIONS (NEW REGULATORY FRAMEWORK) AMENDMENT BILLFirst ReadingHon TIM MACINDOE (Minister of Customs) on behalf of the Minister for Communications: I move That the Telecommunications (New Regulatory Framework) Amendment Bill be now read a first time. I nominate the Commerce Committee to consider the bill. This bill amends the Telecommunications Act 2001 to modernise the Act and establish a stable and predictable framework for fibre access services in New Zealand. It removes unnecessary copper fixed-line access service regulation and streamlines regulatory processes to enable a rapid response to any competition problems particularly in the mobile communications market. It also provides more regulatory oversight of retail service quality and wider consumer protections.The telecommunications market is changing with new technologies shifting consumer behaviour and evolving business models. Alongside this consumers have vastly improved connectivity through the Government's $2 billion roll-out of world-leading communications infrastructure. The Telecommunications (New Regulatory Framework) Amendment Bill will ensure that regulatory settings continue to be fit for purpose and support the evolution of this fast-moving sector. Connectivity is increasingly important for every aspect of New Zealanders' social economic and working lives. Access to faster communications services and infrastructure is a great enabler of economic growth and contributes to increasing the depth and vibrancy of New Zealand's digital economy. To enable this continued growth and wider demand for connectivity our regulatory arrangements need to be modernised.The bill will implement a number of new regulatory arrangements and key changes—firstly the new utility regulation framework. The new regime will ensure that ultra-fast broadband (UFB) providers cannot make excess profits at the expense of consumers while being able to expect reasonable rates of return and incentives for ongoing investment. Under this new fixed-line regulatory framework Chorus will be subject to a revenue cap and the company will be required to provide certain anchor services to its wholesale customers. The revenue cap gives Chorus flexibility in how it sets prices for most of its products but it also ensures that Chorus does not earn excessive returns on its fibre assets.One safeguard built into the system is that Chorus will be required to supply price-regulated anchor products. These will initially be an entry-level broadband product—100 megabits per second upload and 20 megabits per second download—and a voice-only product. These products should ensure that there is price stability for consumers and retail service providers and they should also anchor the price of other products that Chorus offers. Chorus and local fibre companies will also be required to disclose information publicly to enable scrutiny of their performance and profitability. Local fibre companies will face competition from copper and cable networks and are not subject to revenue caps but can be regulated if problems arise.Consistent with Part 4 of the Commerce Act the bill provides for the Commerce Commission to establish new input methodologies and regulatory arrangements to institute the new framework. A clear value will be set for regulated assets at the outset with a predictable process for updating this over time. There will also be a clear process for approval in advance of new investments similar to that which applies to the electricity grid operator Transpower.Secondly the deregulation of copper services—in the areas where fibre services are available the copper network operated by Chorus will be deregulated subject to some protection for consumers. The telecommunications service obligation that provides for price-capped landline and dial-up services will be removed. Consumers will have a wide range of choices in these areas including the option of moving to fibre networks with better services and similar prices.The withdrawal of the copper network by Chorus in given areas will be regulated by a copper withdrawal code that sets out minimum conditions that must be met before a copper line can be withdrawn. In areas where UFB or other fibre is not available the telecommunications service obligation will be retained and Chorus will be required to continue supplying copper services at prices capped at 2019 levels with inflation adjustments over time. This will ensure consumers continue to have access to basic telecommunications services at competitive prices even when alternative networks are not available.Thirdly the streamlining of the process for regulation of services—the bill will encourage further competition in telecommunications services through streamlining the process for commission investigations into regulating telecommunications services in schedule 3 of the Act. These changes allow for more timely intervention by the commission when issues are identified and they further encourage commercial settlements as an alternative to regulation.Fourthly greater consumer protections—the bill improves the Act by enhancing consumer protection. It has become increasingly clear that outcomes for telecommunications consumers are not satisfactory. For example the results of the New Zealand National Consumer Survey 2016 showed that nearly a third of all consumers reported having a problem with either their fixed broadband or their mobile services and 11 percent had problems with both.To lift consumer service quality across the sector and improve the responsiveness to consumer needs the bill augments consumer safeguards and provides for more regulatory oversight of retail quality standards and dispute resolution processes. These arrangements require the Commerce Commission to collect information and report on the quality of retail service delivery in a way that is accessible to consumers require regulatory codes to be established to improve retail service quality if industry self-regulation is inadequate and require the periodic review of the industry-led dispute resolution scheme by the commission.Fifthly in final minor changes enabled by the bill the bill repeals some unnecessary and expired provisions.To sum up the new regulatory framework enabled by this bill will modernise the Telecommunications Act so that it is fit for purpose for New Zealand's new fibre-focused telecommunications environment. It will put in place a balance of incentives so that ongoing investment by network providers will continue to be encouraged while consumers will be protected. It will create a more predictable telecommunications environment target regulation more effectively and support consumers. I commend this bill to the House.