General policy statement
Improvements to allocation of Telecommunications Development Levy liability
The Bill seeks to reduce compliance costs for Telecommunications Development Levy (TDL) payers by addressing identified issues with the liability allocation process.
The Bill, which amends the Telecommunications Act 2001 (the Act), makes the following changes to the liability allocation process:
the Bill will allow prospective liable persons to select their chosen financial year end date rather than mandating the year-ending-30-June format:
the Bill will update terminology by replacing the term “consolidated statement of financial performance” with “group financial statement”:
the Bill will amend the requirements to provide financial statements, so that group financial statements will be required only where they are already required under other legislation:
the Bill will change the default audit and assurance standards for required financial information and provide the Commerce Commission with flexibility to depart from those standards where appropriate:
the Bill will repeal the provision in the Act that prevents the finalisation of the Telecommunications Service Obligation (TSO) cost calculation for a given financial year before the final TDL liability allocation determination is finalised.
Justification for approach taken
These are minor technical changes that will reduce compliance costs for the telecommunications industry and preserve the integrity of the liability allocation system without compromising the purpose of the TDL.
Property access for next generation telecommunications networks
The Bill aims to allow more people to have the benefits of a fibre connection while also reducing the time taken to obtain the consent of all parties who have an interest in the property that a fibre connection needs to occupy, such as shared driveways or the common areas of multi-unit complexes.
The Bill implements a tiered consenting regime where a fibre installation method can be prescribed as one of 2 new categories according to the impact that method is deemed to have on property that multiple parties have an interest in. Category 1 installations will have no substantial enduring impacts on shared property. Those installations will be able to proceed by right provided that no fewer than 5 working days’ notice has been provided to all interested parties.
Category 2 installations will be those that have a greater level of impact, but where the impacts are still considered justifiable in support of the mass market roll-out of a next generation telecommunications network. Those methods will be subject to a deemed consent regime whereby an interested party will be provided with a high-level design plan of what is proposed, and, if no objections are received on specified grounds within 15 working days, the installation can go ahead by right.
Where the property in which multiple parties have an interest is overseen by a governing body, such as unit title or company share properties, category 1 installations will not apply. For those premises, only category 2 will be relevant. The Bill does not change the decision-making structures within those developments. The authority to make decisions, as established by company constitution or by default through legislation, will continue to apply. However, the Bill will overlay a maximum time frame for considering a request of 15 working days from the date that the design plan for a building has been submitted.
Any installation method not prescribed as category 1 or category 2 will be subject to current requirements.
The Bill recognises that where multiple parties have an interest in property, problems similar to those that arise with the initial installation can manifest when service providers and network operators re-enter the property for maintenance purposes. The Bill provides a statutory right of access for service providers and network operators to revisit fibre infrastructure that they own in instances where the consent of 1 or more parties was required for the initial installation.
The Bill replaces the existing regime for access to multi-unit complexes to which fibre-to-the-premises is to be deployed. There are 3 primary differences between the new regime and the existing regime, which are that—
the new regime applies to a wider range of property types, taking in those where there is scope to improve the process of obtaining consent, for example, where driveways are shared or properties occupy land subject to a cross lease:
the new regime better takes account of the physical impacts of installing fibre and excludes the methods considered to be too invasive for a right to be given for their use:
the new regime results in a more efficient process because the number of notices that service providers and network operators are required to serve on affected persons is reduced from 2 to 1 and there is no precondition that the service provider or network operator must have exhausted all reasonable attempts to negotiate access before the statutory right of access can be used.
The Bill establishes an alternative disputes resolution process modelled on the one already in place in respect of the electricity and gas industries. This will ensure that any grievances that may arise as a consequence of a more streamlined access regime may be resolved fairly and efficiently.
Justification for approach taken
Providing for 2 new classes of installation ensures that the installation methods that the majority of people are expected to find reasonable are permitted, while retaining degrees of protection against more invasive methods. The framework has been designed to find the right balance between respecting property rights and the efficient roll-out of infrastructure that is in the national interest.
The approach taken will reduce the frustrations experienced by the many New Zealanders who are seeking fibre and the companies that are installing fibre. Quantifying exactly how many households and businesses will benefit from the Bill is challenging because the mix of installation methods used across the country varies according to terrain, local authority planning rules, and the preferences and technological capability of companies undertaking this work. Noting this caveat, it is estimated that around one-third of all installations in residential driveways will fall under category 1, about a half will be category 2, and the approximately 20% remaining will be subject to the status quo.
Regulatory requirements for Ultra-fast Broadband extension programme
The intent is to extend the regulatory requirements relating to the Ultra-fast Broadband programme. There are 3 primary objectives, which are—
to ensure that any partner selected for the Ultra-fast Broadband extension programme abides by the same open access undertakings as the partners participating in the original Ultra-fast Broadband programme, so as to align with telecommunications regulation generally and bring benefits to retail service providers and end users:
to ensure that any partner selected for the Ultra-fast Broadband extension programme is obliged to provide the same information about its network costs and characteristics to the Commerce Commission annually as partners participating in the original programme:
to mirror the Commerce Act 1986 authorisations implemented for the original Ultra-fast Broadband programme, which would remove a barrier to Chorus Limited (Chorus) participating in the extension programme should it be a successful bidder in the tender process.
The Bill amends the definition of UFB initiative to include the Ultra-fast Broadband extension programme. This definition change flows through to the definition of UFB partner and consequently LFC. Those definition changes mean that participants in the Ultra-fast Broadband extension programme will be subject to the existing provisions in the Act that require open access deeds of undertaking and information disclosure.
The Bill includes a new provision granting a Commerce Act 1986 authorisation to any contract, arrangement, or understanding between the Crown and Chorus that would be required should negotiations lead to Chorus being selected as a partner in a particular region for the Ultra-fast Broadband extension programme. This does not presuppose Chorus’s selection; rather it is to ensure that the Government has all options available to it when approaching negotiations for the UFB 2 programme.
Justification for approach taken
The approach is consistent with what Parliament has already enacted for the original Ultra-fast Broadband programme, which has proven to be successful in managing open access, information disclosure, and the statutory authorisations for that programme.
By limiting changes to the definition of UFB initiative, the policy objective can be achieved with minimal legislative amendment and consequent risk of unforeseen outcomes. The statutory authorisation has been drafted specifically to be limited to a particular circumstance, again consistent with the approach of the UFB programme.