Telecommunications (New Regulatory Framework) Amendment Bill

Telecommunications (New Regulatory Framework) Amendment Bill

Government Bill

293—1

Explanatory note

General policy statement

The purpose of this Bill is to amend the Telecommunications Act 2001 (the Act) to—

  • establish a stable and predictable regulatory framework for fibre fixed line access services in New Zealand:

  • remove unnecessary copper fixed line access service regulation:

  • streamline regulatory processes to enable a rapid response to any competition problems, particularly in the mobile communications market:

  • provide more regulatory oversight of retail service quality.

The new regulatory framework has been designed following a statutory review, as required under section 157AA of the Act (the Review). The Review was conducted between 2012 and 2017. Consultation took place through a series of discussion documents, options papers, and final policy design papers, which are available at: http://www.mbie.govt.nz/info-services/sectors-industries/technology-communications/communications/regulating-the-telecommunications-sector/review-of-the-telecommunications-act-2001.

Key Review findings and rationale for change

The communications sector is a key enabler of economic growth. The Government’s goal is to support a communications environment that provides high-quality and affordable services for all New Zealanders, and enables the New Zealand economy to grow, innovate, and compete in a dynamic global environment.

The Act provides the underlying economic regulation of communications markets in New Zealand.

The Review examined whether the current regulatory framework for telecommunications in New Zealand is the optimal one for competition, investment, and innovation after 2020. It concluded that there was a need for change given the evolution of the telecommunications environment, the growth in fibre networks and services, and changes in the market structure of the industry. These changes require a new approach to telecommunications regulation to ensure that—

  • excessive profits arising from natural monopoly services are limited:

  • regulation is stable and predictable:

  • regulation is only applied to the extent necessary to address a lack of competition:

  • regulation can respond rapidly to a changing environment:

  • market participants are responsive to consumer demands for service quality.

The key outcome of the Review is the introduction of a new regulatory framework for fibre fixed line access services to apply from the implementation date (which will be 1 January 2020 or a date within 2 years of 1 January 2020). The new framework is based on utility regulation in Part 4 of the Commerce Act 1986, and includes 2 types of regulation: price-quality regulation and information disclosure regulation.

From the implementation date, Chorus Limited (Chorus) will be subject to price-quality and information disclosure regulation, and 4 fibre service providers (Ultrafast Fibre Limited, Enable Networks Limited, Northpower Fibre Limited, and Northpower LFC2 Limited) will be subject to information disclosure regulation.

Under this form of price-quality regulation, Chorus will, for at least the first 3-year regulatory period, be subject to a revenue cap and must provide certain anchor services to its wholesale fibre customers. Under information disclosure regulation, Chorus and the 3 other fibre service providers must disclose information publicly to enable scrutiny of their performance and profitability.

The regulatory framework will be implemented by the Commerce Commission (the Commission), led by the Telecommunications Commissioner.

In the areas where fibre services are available, the copper network operated by Chorus will be deregulated and the telecommunications service obligations (TSO) will cease to apply. Chorus may continue to operate the copper fixed-line network in these areas, but it will not be required to do so by regulation.

Withdrawal of the copper network by Chorus in a given area will, however, be regulated by a copper withdrawal code that sets out minimum conditions that must be met before a copper line can be withdrawn.

New regulatory arrangements will be introduced to support consumer service quality across the sector and improve responsiveness to consumer needs. These arrangements enable the Commission—

  • to collect information and report on the quality of retail service delivery in a way that is accessible to consumers:

  • to establish regulatory codes to improve retail service quality, if industry self-regulation is inadequate:

  • to undertake periodic reviews of industry-led dispute resolution schemes.

Specific changes provided by the Bill

The Bill—

  • provides for the establishment of a new utility regulation framework for fibre fixed line access services from the implementation date:

  • deregulates copper fixed line access services in areas where fibre services are available to consumers, while retaining regulation in areas where fibre is not available:

  • puts in place consumer safeguards when copper services are to be withdrawn:

  • streamlines the process for recommending regulation of services in Schedule 3 of the Act:

  • requires the Commission to undertake retail service quality monitoring:

  • provides more regulatory oversight of retail service quality, associated consumer codes, and dispute resolution processes in the telecommunications sector:

  • provides for technical revisions to the Telecommunications Regulatory Levy (TRL), which provide for consistency with the levy arrangements for utility regulation under the Commerce Act 1986:

  • repeals unused, unnecessary, or expired provisions, and updates organisational references.

These specific aspects of the Bill are addressed in further detail below.

A new regulatory framework

The Bill incorporates into the Act arrangements for utility regulation that have been tested in Part 4 of the Commerce Act 1986. The Commission will establish input methodologies and undertake other preparatory work, with the aim of applying the new regulatory framework from 1 January 2020.

Regulation of fibre fixed line access services

The new regulatory framework in the Bill will apply the following forms of regulation to Chorus:

  • price-quality regulation, where price or revenue controls and requirements for service quality are placed on Chorus:

  • information disclosure regulation, which ensures that sufficient information about Chorus’s performance is available, to assess whether the purpose of the regulation is being met.

The Bill provides that local fibre companies (LFCs) that are building networks pursuant to the Government’s Ultra-fast Broadband (UFB) initiative will also be subject to information disclosure regulation, but will not be subject to price-quality regulation. An LFC may later become subject to price-quality regulation, should the Minister accept a recommendation from the Commission that price-quality regulation is necessary.

Establishment of input methodologies

The Bill provides that input methodologies will be developed by the Commission to specify in advance the rules and processes applying to information disclosure and price quality regulation.

The input methodologies will set out rules that apply to the initial setting of the regulated asset base (subject to some additional rules in the Bill itself) and to determining the allowable revenue for Chorus. They will also be used to establish a stable price path for fibre anchor services from the implementation date onwards.

Input methodologies will, at a minimum, relate to the following topics:

  • cost of capital:

  • asset valuation:

  • allocation of costs:

  • treatment of taxation:

  • regulatory processes and rules for the specification of prices and service costs:

  • efficient capital expenditure:

  • quality dimensions for service provision.

Anchor services

The Bill also requires Chorus to offer anchor services, which are wholesale fibre services with price caps based on existing UFB prices. Anchor services are intended to ensure that entry-level broadband and voice-only fibre services are provided by Chorus at reasonable prices and to specific quality standards.

These anchor products will also have an impact beyond the products directly covered, as they will constrain the price of other fibre services provided by Chorus.

Price regulation of direct fibre access services

The Bill provides for pro-competitive regulation of direct fibre access services (DFAS).

DFAS are business-grade layer 1 fibre services that connect large commercial users to the fibre network. It is used by mobile providers to provide dedicated fibre links to the mobile towers that enable mobile companies to provide fixed-wireless services, and by retail service providers for backhaul and to supply large commercial customers. Specific price regulation of this service is included in the Bill to reduce the opportunity for Chorus to arbitrarily increase the costs of this key input to the services of fixed wireless competitors. DFAS will have a price cap based on the existing UFB price.

Retention of requirement to offer unbundled fibre services

The Bill maintains the existing obligations for regulated fibre service suppliers to provide unbundled fibre services from the implementation date. The Bill also enables the Commission to investigate establishing an unbundled fibre service as a price-regulated service from 2023. These open-access arrangements will enhance service innovation, and support the introduction of new network technologies in the future.

Deregulation of certain copper fixed line access services

The Bill refines the regulation of copper fixed line access services from 2020. In areas where fibre is available, Chorus will no longer be required to supply copper fixed line access services, or meet the obligations specified in TSO instruments. However, in areas where fibre services are not available, copper regulation will be maintained. In those areas, Chorus will be required to continue to supply certain regulated copper services, capped at regulated 2019 prices, with inflation adjustments over time. Chorus’s TSO obligations will also be retained in those areas.

Copper withdrawal code

Clause 7 of the Bill inserts new section 69AF into the Act to provide consumer protection measures for consumers of copper fixed line access services, in the event that Chorus seeks to stop supplying copper network services. Before Chorus is permitted to stop supplying a copper service, comparable alternative fibre services must be available at similar prices, with similar functionality, and certain processes must be followed to reduce transitional risks.

Competition in mobile telecommunications markets—Schedule 3 streamlining

The Bill aims to encourage further competition in the mobile market through streamlining the process for Commission investigations into regulating telecommunications services in Schedule 3 of the Act.

The Bill will amend the Schedule 3 process to—

  • impose a hard deadline of 240 working days for the Commission to complete its investigation and recommend to the Minister for Communications whether to regulate a telecommunications service (120 working days for investigations in relation to the upgrade of an existing service):

  • provide the Commission with the flexibility to decide whether to hold conferences and public hearings:

  • allow for a single undertakings process in place of successive incremental undertakings, which can reduce the effect of the regulatory process and delay determinations:

  • enable the Commission to propose a single-stage pricing process when recommending regulation to the Minister for Communications (instead of a 2-stage process involving first international benchmarking and then cost modelling).

These changes allow for more timely intervention by the Commission when issues are identified, and further encourage commercial settlements as an alternative to regulation.

Improving consumer retail service quality

The Bill aims to assist consumers to make informed choices about retail telecommunications services by improving the information available to consumers. More regulatory oversight of the development and maintenance of consumer codes will provide retail service providers with more incentives to improve the quality of their services. The Bill will also support more efficient and responsive dispute resolution procedures for consumers.

To meet these policy objectives, the Bill—

  • requires the Commission to monitor and report on retail service quality for telecommunications consumers, and to make such information readily available to consumers:

  • allows the Commission to monitor industry-based retail service quality codes and allows the Commission to make such codes should industry-led codes be assessed as inadequate:

  • provides the Commission with the ability to review the performance of industry-led dispute resolution providers and recommend change:

  • incorporates certain remedies from the Fair Trading Act 1986, along with information disclosure, compliance, and enforcement powers from the Commerce Act 1986, with some refinements. These compliance and enforcement measures allow the Commission to issue civil infringement notices or apply for pecuniary penalties or other remedies:

  • provides for the Commission to accept enforceable undertakings in relation to breaches of Commission retail service quality codes.

Following a Commission retail service quality code breach, the Commission may also seek orders from the High Court for the disclosure of information or publication of corrective statements.

Remedies equivalent to those in the Fair Trading Act 1986 will enable the High Court to issue orders directing the payment of a refund, return of property, payment of loss or damage, and supply of specified services.

Technical revisions to levy provisions

The new regulatory obligations to be inserted in new Part 6 of the Act will take a number of years to complete and implement. The Bill provides for a minor change in levy arrangements to enable levies to be set over a multi-year appropriation period, rather than a financial year. This enables consistency with similar levy-setting arrangements provided in Part 4 of the Commerce Act 1986. The approach in the Bill enables the TRL to be revised on a multi-year basis, subject to full consultation. It also enables input methodology regulatory development to be commenced and resourced before the first regulatory period commences.

Miscellaneous revisions

The Bill repeals redundant miscellaneous provisions in the Act, as follows:

  • an outdated criminal offence of indecent telephone calls for pecuniary gain (section 113):

  • sections within Part 2A relating to the structural separation of Telecom that are no longer needed:

  • expired provisions in the Act:

  • the requirement for the Minister to review the regulatory framework, as this review has now been completed:

  • line-of-business restrictions for Chorus that do not add to the retained fundamental prohibition on participation in retail (sections 69R and 69S).

In addition, outdated references to Telecom, Spark, and the Ministry of Economic Development will be updated.

Departmental disclosure statement

The Ministry of Business, Innovation, and Employment is required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.

Clause by clause analysis

Clause 1 is the Title clause.

Clause 2 is the commencement clause. Most of the Bill comes into force on the day after Royal assent. However, the following provisions have a later commencement date for transitional reasons:

  • clause 11, in so far as it repeals provisions that lead to Chorus’s unbundled copper local loop network and Chorus’s unbundled copper local loop network backhaul (distribution cabinet to telephone exchange) ceasing to be designated services within Part 2 of Schedule 1, comes into force on 1 January 2020:

  • clause 35, in so far as it repeals subpart 3 of Part 4AA (which relates to information disclosure regulation), comes into force on 1 January 2022.

While most of the Act commences on the day after Royal assent, a number of the provisions only have practical consequences on and after the implementation date (see note on clause 4 below). The implementation date mechanism is used to allow greater flexibility in case the Commerce Commission is not able to implement the new regulatory framework on and after 1 January 2020.

Clause 3 identifies the Telecommunications Act 2001 (the principal Act) as the principal Act being amended.

The Bill is in 3 Parts as follows:

  • Part 1 includes amendments to definitions and amendments related to copper fixed line access services:

  • Part 2 includes amendments related to fibre fixed line access services:

  • Part 3 includes amendments related to consumer matters, consequential amendments, and other miscellaneous amendments.

Part 1Amendments to definitions and amendments related to copper fixed line access services

Clause 4 amends section 5 to insert new definitions, and to update the definitions of access provider and access seeker in relation to fibre services. The more important new definitions inserted include the following:

  • copper fixed line access services, which are Chorus’s unbundled bitstream access and Chorus’s unbundled copper low frequency service:

  • fibre fixed line access service, which is a telecommunications service that enables access to, and interconnection with, a regulated fibre service provider’s fibre network (subject to specified exceptions):

  • implementation date, which is 1 January 2020 or a date up to 2 years later than 1 January 2020:

  • regulated fibre service provider, which is a person prescribed in regulations as being subject to 1 or both of price-quality regulation and information disclosure regulation:

  • retail service quality code, which means a code of conduct relating to retail service quality that applies to the provision of 1 or more types of telecommunications service:

  • specified fibre area, which is a geographic area in which fibre fixed line access services are available to end-users.

Clause 5 amends section 19 to require the Commission and the Minister to consider the purpose set out in section 18 when making a recommendation, determination, or decision under new Part 2AA.

Clause 6 amends section 66 to reflect that not all telecommunications services in Schedule 1 will always have an initial pricing principle.

Clause 7 inserts new Part 2AA, which deregulates certain copper telecommunications services and includes the following new provisions:

  • new section 69AA, which sets out the purpose of the Part:

  • new section 69AB, which sets out the process for the Commission to investigate and declare an area to be a specified fibre area:

  • new sections 69AC and 69AD, which set out the requirement for Chorus to continue to supply services that become deregulated unless Chorus complies with the copper withdrawal code:

  • new section 69AE, which provides that specified TSO instruments cease to apply in areas that become specified fibre areas:

  • new section 69AF, which is the operative provision for new Schedule 2A, which sets out the framework for the copper withdrawal code:

  • new section 69AG, which provides for the continued application of specified standard terms determinations:

  • new section 69AH, which requires the Commission to investigate the regulation of specified copper telecommunications services by 31 December 2025 (or to provide reasons why there were no reasonable grounds to start such an investigation).

Clause 8 amends section 69XA to exclude services supplied in relation to end-users in specified fibre areas from the definitions of relevant regulated services and relevant services.

Clause 9 amends section 157 to insert a regulation-making power related to the copper withdrawal code.

Clause 10 inserts new Part 2 into Schedule 1AA of the principal Act. New Part 2 contains transitional provisions related to the Bill as follows:

  • new clause 7 sets out the process by which the implementation date may be deferred for up to a maximum of 2 years beyond 1 January 2020:

  • new clause 8 sets out the transitional rule for local fibre companies that are or may be subject to information disclosure requirements under both subpart 3 of Part 4AA and new Part 6:

  • new clause 9 modifies new section 206 in relation to anchor services reviews that take place before the implementation date:

  • new clause 10 modifies the procedural requirements that apply to the regulation-making power in new section 222 in relation to regulations made before the start of the first regulatory period:

  • new clauses 11 to 13 modify the procedural requirements that apply to specified regulation-making powers in relation to the first regulations made under new sections 223, 224, and 225.

Clause 11 amends Schedule 1 of the principal Act. The most important changes are as follows:

  • repealing out-of-date references to separation day in relation to designated services:

  • updating initial and final pricing principles for designated services to reflect new standard terms determinations:

  • amending the specification of Chorus’s unbundled bitstream access and Chorus’s unbundled copper low frequency service to include a geographical condition that the services are not supplied in relation to an end-user in a specified fibre area:

  • deleting Chorus’s unbundled copper local loop network and Chorus’s unbundled copper local loop network backhaul (distribution cabinet to telephone exchange) from the list of designated services (with effect on and after 1 January 2020).

Clause 12 inserts new Schedule 2A into the principal Act. New Schedule 2A contains the framework provisions for the copper withdrawal code, including a requirement for the Commission (or the Forum) to prepare the code and the minimum consumer protection requirements that the code must contain.

Clause 13 amends Schedule 3 of the principal Act to change the procedure for investigations that take place under Schedule 3. The most important change is to insert new hard deadlines for when the Commission must complete investigations under Schedule 3.

Clause 14 amends Schedule 3A of the principal Act to streamline the undertaking procedure in that schedule by restricting access providers from making multiple applications in relation to undertakings.

Part 2Amendments related to fibre fixed line access services

Clause 15 amends section 10—

  • to provide that the Telecommunications Commissioner and no fewer than 2 other members of the Commerce Commission must make every determination in respect of fibre fixed line access services under new Part 6; and

  • to make a minor change to section 10(1)(c)(ii) regarding the number of Commission members required to perform certain functions.

Clause 16 amends section 11 to replace references to financial years with references to appropriation periods.

Clause 17 amends section 12 to—

  • delete spent provisions; and

  • replace references to financial years with references to appropriation periods; and

  • insert a new provision regarding a levy being payable in connection with costs relating to the Commission’s functions, duties, and powers under new Part 6.

Clause 18 amends section 15 to provide that certain provisions of the Commerce Act 1986 apply with any necessary modifications as specified in new Part 6 or new section 156MD.

Clause 19 amends section 19A to provide that, in the exercise of its powers under new Part 6, the Commission must have regard to certain specified economic policies of the Government.

Clause 20 amends the definition of non-discrimination in section 156AB (which applies in Part 4AA) to delete the equivalence wording. The amended definition applies in Part 4AA except in subpart 4.

Clause 21 inserts new section 156ANA, which provides for the Minister to approve amendments or consolidations of undertakings in specified circumstances.

Clause 22 amends section 156AX to insert a definition of non-discrimination (to apply in subpart 4 of Part 4AA) that continues to contain the equivalence wording that is being deleted from the Part definition by clause 22.

Clause 23 inserts new Part 6, which contains the new regulatory framework for fibre fixed line access services and is based on the regulation of utilities in Part 4 of the Commerce Act 1986. New Part 6 is made up of 10 subparts and more detail about each of these is provided below.

New subpart 1 contains general provisions (including a purpose clause) and defines terms used in new Part 6.

New subpart 2 sets out the different types of regulation that apply under new Part 6 and provides for the Commission to make determinations specifying how each type of regulation applies to regulated fibre service providers. New section 170 contains the determination-making power and is based on section 52P of the Commerce Act 1986.

New subpart 3 relates to input methodologies and provides for the Commission to determine input methodologies applying to the regulation of fibre fixed line access services. New section 175 sets out the matters covered by input methodologies and new section 176 contains provisions regarding the initial valuation of assets. New sections 182 to 184 contain provisions relating to appeals against input methodology determinations.

New subpart 4 relates to information disclosure regulation and provides that certain regulated fibre service providers are required to disclose information in accordance with requirements determined by the Commission. New sections 186 to 188 set out the effect of being subject to information disclosure regulation and list the detailed types of information a provider may be required to disclose.

New subpart 5 relates to price-quality regulation and provides that certain regulated fibre service providers are required to apply the price-quality paths determined by the Commission. In particular,—

  • new section 192 sets out the effect of being subject to price-quality regulation:

  • new section 193 sets out what a price-quality path must contain, including requirements related to maximum revenues and maximum prices:

  • new section 194 requires the price-quality path for each regulatory period that starts before the reset date (see the note on new section 215 below) to specify the maximum revenues that may be recovered by a regulated fibre service provider:

  • new section 195 is related to new section 194 and requires the maximum revenues specified in a price-quality path for a regulatory period that starts before the reset date (except for the first regulatory period) to be calculated using the specified wash-up mechanism:

  • new sections 197 and 198 require regulated fibre service providers to provide, during the relevant prescribed period, anchor services and direct fibre access services at a price that is no greater than the relevant prescribed maximum price:

  • new section 199 requires regulated fibre service providers to provide, during the prescribed period, unbundled fibre services at a price that is no greater than any prescribed maximum price:

  • new section 200 provides that regulated fibre service providers who are subject to price-quality regulation must charge the same price for providing fibre fixed line access services that are, in all material respects, the same, regardless of the geographic location of the access seeker or end-user.

New subpart 6 provides that the first regulatory period starts on the implementation date and lasts for 3 years. New subpart 6 also provides that the duration of subsequent regulatory periods must be determined by the Commission and must be between 3 and 5 years.

New subpart 7 contains provisions relating to reviews and investigations, including as follows:

  • new section 206 provides a power for the Commission to review anchor services (including specifications and maximum prices):

  • new section 207 provides a power for the Commission to review the requirement for price-quality paths to specify maximum revenues, and provisions relating to the requirement to provide direct fibre access services and unbundled fibre services:

  • new section 208 provides for the Commission to carry out a more general deregulation review.

New subpart 8 contains provisions relating to—

  • enforcement; and

  • the powers of the Commission, incorporation of material by reference, and the disclosure of commercially sensitive information.

The enforcement provisions are based on sections 86 to 90 (except sections 86C and 89) of the Commerce Act 1986. However the maximum penalty included in new section 213 is higher than its equivalent provision in section 87 of the Commerce Act. The provisions include the following:

  • new section 210, which provides for pecuniary penalties for breaching information disclosure requirements:

  • new section 211, which provides for the High Court to make an order requiring a regulated fibre service provider to comply with an information disclosure requirement:

  • new section 212, which contains offences relating to information disclosure regulation:

  • new section 213, which provides for pecuniary penalties for breaching price-quality requirements (including a maximum penalty of $10,000,000):

  • new section 214, which provides for the High Court to make an order requiring a person who breaches a price-quality requirement to pay compensation to a person who suffers loss or damage as a result of the breach:

  • new section 215, which contains offences relating to price-quality regulation:

  • new section 216, which provides the High Court with a power to grant injunctions or to require a regulated fibre services provider to provide fibre fixed line access services.

New subpart 9 relates to appeals and is based on section 91 of the Commerce Act 1986. New section 220 provides general rights of appeal to the High Court against a determination under new Part 6, subject to specified exceptions.

New subpart 10 contains order-making and regulation-making powers as follows:

  • new section 221 contains a power for the Governor-General to declare the date after which price-quality paths are not required to specify a maximum revenue requirement:

  • new section 222 contains a power for the Governor-General to prescribe a person as being subject to 1 or both of price-quality regulation and information disclosure regulation. In relation to the first regulatory period, this power is expected to be used to prescribe Chorus as being subject to price-quality regulation and information disclosure regulation and the local fibre companies as being subject to information disclosure regulation:

  • new section 223 contains a power for the Governor-General to prescribe various matters related to anchor services:

  • new section 224 contains a power for the Governor-General to prescribe various matters related to direct fibre access services:

  • new section 225 contains a power for the Governor-General to prescribe various matters related to unbundled fibre services:

  • new section 226 contains a power for the Governor-General to prescribe points of interconnection for the purposes of establishing fibre handover points.

Part 3Amendments related to consumer matters, consequential amendments, and other miscellaneous amendments

Clause 24 amends section 9A to confer additional functions on the Commission to monitor and report on retail service quality in relation to telecommunications services. Clause 24 also amends section 9A to provide the Commission with a power to require service providers to prepare and produce certain information.

Clause 25 amends section 156A to add failing to comply with a Commission retail service quality code or the copper withdrawal code to the list of breaches to which section 156B (which relates to enforcement) applies.

Clause 26 amends section 156B to allow the following additional enforcement options in relation to a breach of a Commission retail service quality code or the copper withdrawal code:

  • an option for the Commission to accept undertakings under new section 156CA as an alternative to serving a civil infringement notice or applying to the High Court for an order under section 156L:

  • in relation to a breach of a Commission retail service quality code, an option for the Commission to apply to the High Court for an order under any of the following:

    • new section 156MA, which relates to disclosing information:

    • new section 156MB, which contains a power for the High Court to make orders voiding or varying contracts, or requiring a provider to refund money, return property, compensate for loss or damage, or supply services:

  • in relation to a breach of the copper withdrawal code, an option for the Commission to apply to the High Court for an order under any of the following:

    • new section 156MC, which contains a power for the High Court to make orders requiring a provider to compensate an end-user for loss or damage or supply services to the end-user:

    • new section 156MD, which contains a power for the High Court to grant an injunction against a provider.

Clause 27 inserts new section 156BA, which allows an end-user to take enforcement action under new sections 156MC and 156MD in certain situations.

Clause 28 inserts new sections 156CA and 156CB. New section 156CA allows the Commission to accept an undertaking from a person in relation to a breach of a Commission retail service quality code or the copper withdrawal code. New section 156CB contains the penalties for breach of an undertaking, which include a power for the court to make an order requiring the person in breach to pay a pecuniary penalty.

Clause 29 inserts new sections 156MA to 156MD, which relate to additional remedies for breach of a Commission retail service quality code or the copper withdrawal code (see the note on clause 26 above).

Clause 30 replaces section 156T in Part 4B. Part 4B, which relates to consumer complaints, was inserted into the principal Act by section 54 of the Telecommunications Amendment Act (No 2) 2006 but is not yet in force. Section 156S provides that Part 4B comes into force on a date to be appointed by the Governor-General, by Order in Council, made on the recommendation of the Minister in accordance with section 156T. Section 156T contains the process that must be followed before the Minister can recommend that Part 4B comes into force. New section 156T contains the following additional situation in which the Minister can recommend that Part 4B should come into force:

  • if the Commission reports to the Minister, under new section 240, that the industry dispute resolution scheme fails to achieve the purpose of a dispute resolution scheme (as defined in new section 241) or the industry dispute resolution scheme provider fails to meet the purpose of a scheme provider (as defined in new section 242).

Clauses 31 and 32 amend sections 156UA and 156Y in Part 4B. These amended sections clarify the relationship between a consumer complaints system under Part 4B and a Commission retail service quality code under new Part 7.

Clause 33 inserts new Part 7. New Part 7 contains provisions relating to consumer matters, and in particular contains provisions regarding retail service quality codes and dispute resolution schemes. The new provisions include—

  • new section 227, which provides that the purpose of a retail service quality code is to improve retail service quality for consumers of telecommunications services:

  • new section 228, which contains definitions (the most important of which defines the industry dispute resolution scheme as the Telecommunications Dispute Resolution Scheme established by the Forum):

  • new section 229, which provides a power for the Commission to issue guidelines to the industry on matters relating to retail service quality codes:

  • new section 230, which provides a power for the Commission to review industry retail service quality codes and advise the Minister of whether a Commission retail service quality code would better achieve the purpose in new section 227:

  • new section 231, which sets out when the Commission is able to make a Commission retail service quality code and the steps the Commission must take before it is able to do so:

  • new section 232, which sets out the framework for what a Commission retail service quality code must contain:

  • new section 233, which sets out the process, including consultation requirements, that applies to making a Commission retail service quality code:

  • new section 234, which provides that the industry dispute resolution scheme is to be the dispute resolution scheme for all Commission retail service quality codes (unless Part 4B of the principal Act comes into force):

  • new section 235, which provides that disputes in relation to a Commission retail service quality code may be referred to the industry dispute resolution scheme:

  • new sections 236 to 239, which are based on sections 155ZJ to 155ZL of the principal Act, and which set out how decisions of the industry dispute resolution scheme are binding and the rights of appeal that exist:

  • new section 240, which requires the Commission to review all industry dispute resolution schemes at least once every 3 years and provide reports and recommendations to the scheme provider or the Minister (as appropriate):

  • new section 241, which provides that the purpose of a dispute resolution scheme is to ensure that, if a consumer has a dispute with a service provider in relation to a retail service quality code, the consumer has access to a dispute resolution scheme for resolving that dispute in a timely manner:

  • new section 242, which sets out the purpose of a dispute resolution scheme provider:

  • new section 243, which sets out the relationship between remedies available under new Part 7 and remedies available under other provisions.

Clause 34 replaces each reference to Telecom identified in Schedule 4 with a reference to Spark.

Clause 35 repeals provisions that are obsolete, redundant, or no longer necessary in light of the new regulatory framework in new Part 6. These repeals include the following:

  • sections 30U to 30ZD, which relate to residual terms determinations:

  • Part 2B, which relates to information disclosure:

  • section 113, which contains an offence related to making indecent telephone calls for pecuniary gain:

  • subpart 3 of Part 4AA, which relates to information disclosure.

Clause 36 makes consequential amendments related to the repeals being made by clause 35.

Clause 37 makes miscellaneous amendments to update terminology and references to Telecom.

Hon Simon Bridges

Telecommunications (New Regulatory Framework) Amendment Bill

Government Bill

293—1

Contents

Explanatory note
1Title
2Commencement
3Principal Act
4Section 5 amended (Interpretation)
5Section 19 amended (Commission and Minister must consider purpose set out in section 18 and additional matters)
6Section 66 amended (Alterations to Part 2 or Part 3 of Schedule 1)
7New Part 2AA inserted
69AAPurpose
69ABSpecified fibre areas
69ACWithdrawal of copper fixed line access services
69ADWithdrawal of certain designated access services
69AEApplication of certain TSO instruments in specified fibre areas
69AFCopper withdrawal code
69AGContinued application of certain standard terms determinations
69AHSchedule 3 modified for investigation of certain copper services
8Section 69XA amended (Interpretation)
9Section 157 amended (Regulations)
10Schedule 1AA amended
11Schedule 1 amended
12New Schedule 2A inserted
13Schedule 3 amended
14Schedule 3A amended
15Section 10 amended (Performance of Commission’s functions)
16Section 11 amended (Levy)
17Section 12 amended (Levy for first financial year or part financial year)
18Section 15 amended (Application of Commerce Act 1986 and Crown Entities Act 2004)
19Section 19A amended (Commission to have regard to economic policies of Government)
20Section 156AB amended (Interpretation)
21New section 156ANA inserted (Amendment or consolidation of undertaking)
156ANAAmendment or consolidation of undertaking
22Section 156AX amended (Interpretation of this subpart)
23New Part 6 inserted
162Purpose
163Overview
164Interpretation
165Meaning and application of claw-back
166Commission and Minister must consider purpose set out in section 162
167Regulation of fibre fixed line access services
168Information disclosure regulation
169Price-quality regulation
170Determinations by Commission under this section
171When Commission must make initial section 170 determinations
172Amendment of section 170 determination
173Purpose of input methodologies
174How published input methodologies apply
175Matters covered by input methodologies
176Initial value of fibre assets
177When input methodologies must be determined
178Commission process for determining input methodologies
179Publication of input methodologies
180Changes to input methodologies
181Review and date of publication of input methodologies
182Appeals against input methodology determinations
183Process for appeals
184Input methodology applies pending outcome of appeal
185Purpose of information disclosure regulation
186Effect of being subject to information disclosure regulation
187Section 170 determination to set out information disclosure requirements
188Consolidated information may also be required
189Charge for providing copies to public
190Limited exception to obligation to apply input methodologies
191Purpose of price-quality regulation
192Effect of being subject to price-quality regulation
193Section 170 determination to set out price-quality path requirements
194Maximum revenues specified in initial price-quality paths
195Wash-up mechanism for maximum revenues specified in initial price-quality paths
196Smoothing revenues and prices
197Anchor services
198Direct fibre access services
199Unbundled fibre services
200Geographically consistent pricing
201Making new section 170 determination
202What happens to price-quality path if input methodologies change
203Application of Commerce Act 1986
204Modification of undertakings under section 156AD
205Regulatory periods
206Anchor services review
207Price-quality review
208Deregulation review
209Application of Schedule 3
210Pecuniary penalty for contravening information disclosure requirement
211Order requiring information disclosure requirement to be complied with
212Offences relating to information disclosure regulation
213Pecuniary penalty for contravening price-quality requirements
214Compensation for contravention of price-quality requirement
215Offence relating to price-quality regulation
216Injunction and other orders relating to price-quality regulation
217Powers of Commission under this Part
218Power to exempt disclosure of commercially sensitive information
219Material may be incorporated by reference
220Appeals in relation to Commission determinations
221Order for reset date
222Persons subject to regulation under Part 6
223Anchor services
224Direct fibre access services
225Unbundled fibre services
226Specified points of interconnection
24Section 9A amended (Functions of Commission in relation to sector monitoring and information dissemination)
25Section 156A amended (Application of section 156B)
26Section 156B amended (Enforcement actions that Commission may take)
27New section 156BA inserted (Enforcement actions that end-user may take)
156BAEnforcement actions that end-user may take
28New sections 156CA and 156CB and cross-heading inserted
156CACommission may accept undertakings
156CBEnforcement of undertakings
29New sections 156MA to 156MD and cross-headings inserted
156MAOrder to disclose information or publish advertisement
156MBOther orders for breach of Commission RSQ code
156MCOther orders for breach of copper withdrawal code
156MDInjunctions for breach of copper withdrawal code
30Section 156T replaced (Process to apply before Part may be commenced)
156TProcess to apply before Part may be commenced
31Section 156UA amended (Appointment of consumer complaints system)
32Section 156Y amended (Requirements for consumer complaints system)
33New Part 7 inserted
227Purpose of retail service quality code
228Interpretation
229Commission may issue guidelines
230Commission review of industry retail service quality codes
231Commission retail service quality code
232Contents of Commission retail service quality code
233Process for making or amending Commission retail service quality code
234Dispute resolution scheme
235Disputes may be referred to dispute resolution scheme
236Determinations binding on scheme members and certain other parties
237Appeals against determinations
238Procedure on appeal
239Compliance with rules, binding settlements, and determinations
240Commission review of industry dispute resolution schemes
241Purpose of dispute resolution scheme
242Purpose of dispute resolution provider
243Interrelationship of remedies
34Amendments to replace references to Telecom
35Repeals
36Consequential amendments
37Miscellaneous amendments

The Parliament of New Zealand enacts as follows:

1 Title

This Act is the Telecommunications (New Regulatory Framework) Amendment Act 2017.

2 Commencement

(1)

The following provisions come into force on 1 January 2020:

(a)

section 11, in so far as it repeals, in subpart 1 of Part 2 of Schedule 1 of the principal Act, the heading Chorus’s unbundled copper local loop network and each item related to the heading:

(b)

section 11, in so far as it repeals, in subpart 1 of Part 2 of Schedule 1 of the principal Act, the heading Chorus’s unbundled copper local loop network backhaul (distribution cabinet to telephone exchange) and each item related to the heading.

(2)

Section 35, in so far as it repeals subpart 3 of Part 4AA of the principal Act, comes into force on 1 January 2022.

(3)

The rest of this Act comes into force on the day after the date on which this Act receives the Royal assent.

3 Principal Act

This Act amends the Telecommunications Act 2001 (the principal Act).

Part 1 Amendments to definitions and amendments related to copper fixed line access services

4 Section 5 amended (Interpretation)

(1)

In section 5, insert in their appropriate alphabetical order:

annual CPI adjustment means, in relation to a price, an annual adjustment to the price that is equal to any percentage movement in the CPI as measured between—

(a)

the CPI for the quarter that ended most recently before the price adjustment; and

(b)

the CPI for the equivalent quarter in the preceding year

appropriation period means, in relation to a cost,—

(a)

a financial year; or

(b)

if the cost will be incurred under the authority of a multi-year appropriation or of a multi-year appropriation proposed in any Estimates, the financial years to which the multi-year appropriation applies

Commission retail service quality code or Commission RSQ code means a retail service quality code made by the Commission under Part 7

copper fixed line access services means the following (as they are described in subpart 1 of Part 2 of Schedule 1):

(a)

Chorus’s unbundled bitstream access:

(b)

Chorus’s unbundled copper low frequency service

document, except in section 69XQ, has the same meaning as in section 2(1) of the Commerce Act 1986

Estimates

(a)

has the same meaning as in section 2(1) of the Public Finance Act 1989; and

(b)

includes Supplementary Estimates as defined in section 2(1) of that Act

fibre fixed line access service

(a)

means a telecommunications service that enables access to, and interconnection with, a regulated fibre service provider’s fibre network; but

(b)

does not include a telecommunications service provided by a regulated fibre service provider (F) if the ultimate recipient of the service is F or a related party of F (as if the test for related parties were the same as the test in section 69U, applied with any necessary modifications)

fibre handover point means the external network-to-network interface (or equivalent facility) located at the specified point of interconnection for the relevant end-user premises or access point that enables access to, and interconnection with, a regulated fibre service provider’s fibre network

fibre network means a fibre-to-the-premises access network (as defined in section 156AB) that connects the user-network interface (or equivalent facility) of an end-user premises or access point to a regulated fibre service provider’s fibre handover point

implementation date means the later of—

(a)

1 January 2020; and

(b)

any date specified by the Minister in accordance with clause 7 of Part 2 of Schedule 1AA

industry retail service quality code or industry RSQ code means a retail service quality code made by the Forum

multi-year appropriation means an appropriation authorised to apply for more than 1 financial year (see section 10 of the Public Finance Act 1989)

regulated fibre service provider means a person who is prescribed in regulations made under Part 6 as being subject to 1 or both of the following:

(a)

information disclosure regulation:

(b)

price-quality regulation

retail service quality, in relation to a telecommunications service, means the quality of retail service provided to an end-user of the service, including in relation to the following:

(a)

customer service and fault service levels:

(b)

installation issues:

(c)

contract issues:

(d)

product disclosure:

(e)

billing:

(f)

the switching process and related information:

(g)

service performance, speed, and availability

retail service quality code means a code of conduct relating to retail service quality that applies to the provision of 1 or more types of telecommunications service

Spark

(a)

means Spark New Zealand Limited (the company previously known, before 8 August 2014, as Telecom); and

(b)

includes any of its subsidiaries

specified fibre area means an area that has been declared by the Commission, under section 69AB, to be a specified fibre area

specified point of interconnection means the point of interconnection prescribed under section 226 for the end-user premises or access point

(2)

In section 5, definition of access provider, paragraph (b), after “Schedule 3A”, insert “; and”.

(3)

In section 5, definition of access provider, after paragraph (b), insert:

(c)

means, in relation to a fibre fixed line access service, the regulated fibre service provider who provides the service

(4)

In section 5, definition of access seeker, paragraph (b), after “access seeker”, insert “; and”.

(5)

In section 5, definition of access seeker, after paragraph (b), insert:

(c)

means, in section 155ZZD, a person who seeks access to a fibre optic cable that must be provided on an open access basis under that section; and

(d)

means, in relation to a fibre fixed line access service, a person who seeks access to the service from the regulated fibre service provider

5 Section 19 amended (Commission and Minister must consider purpose set out in section 18 and additional matters)

In section 19, after “this Part”, insert “, Part 2AA,”.

6 Section 66 amended (Alterations to Part 2 or Part 3 of Schedule 1)

(1)

In section 66(a)(v)(A), replace “the applicable initial pricing principle” with “any applicable initial pricing principle”.

(2)

In section 66(c)(vii), replace “the applicable initial pricing principle” with “any applicable initial pricing principle”.

7 New Part 2AA inserted

After section 69, insert:

Part 2AA Deregulating copper fixed line access services

Subpart 1—Purpose

69AA Purpose

The purpose of this Part is to—

(a)

deregulate copper fixed line access services in areas where fibre fixed line access services are available; and

(b)

provide protections for end-users of copper fixed line access services and certain other designated services in deregulated areas; and

(c)

provide for the Commission to investigate whether the regulation of copper fixed line access services and certain other designated services should be altered.

Subpart 2—Deregulating copper fixed line access services

69AB Specified fibre areas

(1)

The Commission must, before the implementation date and at least annually thereafter, carry out an assessment to determine the geographic areas in which fibre fixed line access services are available to end-users.

(2)

The Commission must, by public notice, declare an area to be a specified fibre area if the Commission determines in an assessment under subsection (1) that fibre fixed line access services are available to end-users in the area.

(3)

A notice under this section must specify the date on and after which the area is to be a specified fibre area, and that date must not be before the implementation date.

(4)

A notice under this section may describe an area by any means, including (without limitation)—

(a)

by use of a map; and

(b)

by a narrative description of the area.

(5)

The Commission must maintain a record of all specified fibre areas that is available, at all reasonable times, for inspection on the Commission’s Internet site in an electronic form that is publicly accessible.

69AC Withdrawal of copper fixed line access services

(1)

This section applies if—

(a)

Chorus is required by a standard terms determination made under section 30M to supply a copper fixed line access service to an access seeker; and

(b)

Chorus started supplying the service at a time when the end-user’s building (or, where relevant, the building’s distribution frame) was not located in a specified fibre area; and

(c)

as a result of a notice under section 69AB,—

(i)

the end-user’s building (or, where relevant, the building’s distribution frame) becomes located in a specified fibre area; and

(ii)

the service ceases to be a designated access service in the specified fibre area on and after the date specified in the notice.

(2)

Chorus may stop supplying the service referred to in subsection (1) only if—

(a)

Chorus complies with the requirements of the copper withdrawal code in relation to stopping the supply of the service; or

(b)

the end-user chooses to have the service disconnected (other than a temporary disconnection).

(3)

To avoid doubt, Chorus is not required to—

(a)

supply a service that ceases to be a designated access service in relation to a new end-user; or

(b)

resupply a service that Chorus has stopped supplying in accordance with subsection (2).

69AD Withdrawal of certain designated access services

(1)

This section applies if—

(a)

Chorus is required by a standard terms determination made under section 30M to supply 1 or both of the following services to an access seeker:

(i)

Chorus’s unbundled copper local loop network:

(ii)

Chorus’s unbundled copper local loop network backhaul (distribution cabinet to telephone exchange); and

(b)

Chorus started supplying the service at a time when the service was a designated access service; and

(c)

as a result of section 11 of the Telecommunications (New Regulatory Framework) Amendment Act 2017, the service ceases to be a designated access service on and after 1 January 2020.

(2)

Chorus may stop supplying the service referred to in subsection (1) only if—

(a)

Chorus complies with the requirements of the copper withdrawal code in relation to stopping the supply of the service; or

(b)

the end-user chooses to have the service disconnected (other than a temporary disconnection).

(3)

To avoid doubt, Chorus is not required to—

(a)

supply a service that ceases to be a designated access service in relation to a new end-user; or

(b)

resupply a service that Chorus has stopped supplying in accordance with subsection (2).

69AE Application of certain TSO instruments in specified fibre areas

Despite anything in this Act, the following TSO instruments cease to apply in relation to an area that becomes a specified fibre area:

(a)

Telecommunications Service Obligations (TSO) Deed for Local Residential Telephone Service:

(b)

Telecommunications Service Obligations (TSO) Deed for TSO Network Service.

69AF Copper withdrawal code

(1)

In this Part, copper withdrawal code means the code approved under Schedule 2A setting out minimum consumer protection requirements for end-users of the following:

(a)

copper fixed line access services in areas that become specified fibre areas:

(b)

Chorus’s unbundled copper local loop network:

(c)

Chorus’s unbundled copper local loop network backhaul (distribution cabinet to telephone exchange).

(2)

Schedule 2A sets out the provisions that apply to the copper withdrawal code.

Subpart 3—Price regulated copper services

69AG Continued application of certain standard terms determinations

(1)

Subsection (2) applies to a standard terms determination made under section 30M that, immediately before 1 January 2020, applies to 1 or more of the following services:

(a)

Chorus’s unbundled bitstream access backhaul:

(b)

Chorus’s unbundled copper local loop network co-location:

(c)

Chorus’s unbundled copper local loop network backhaul (telephone exchange to interconnect point).

(2)

Despite anything in this Act, during the period starting on 1 January 2020 and ending on the close of the day immediately before the copper review date for the relevant service,—

(a)

the determination continues to apply to the relevant service, except that the maximum prices increase or decrease (as appropriate) by an annual CPI adjustment on 1 January in each year; and

(b)

sections 30R and 59 cease to apply in respect of the determination.

(3)

Subsection (4) applies to a standard terms determination made under section 30M that, immediately before 16 December 2019, applies to 1 or both of the following services:

(a)

Chorus’s unbundled bitstream access:

(b)

Chorus’s unbundled copper low frequency service.

(4)

Despite anything in this Act, during the period starting on 16 December 2019 and ending on the close of the day immediately before the copper review date for the relevant service,—

(a)

the determination continues to apply to the relevant service, except that the maximum prices increase or decrease (as appropriate) by an annual CPI adjustment on 16 December in each year; and

(b)

sections 30R and 59 cease to apply in respect of the determination.

(5)

On and after the copper review date for a service referred to in subsection (1) or (3),—

(a)

the standard terms determination for the service continues to apply; and

(b)

Part 2 (including sections 30R and 59) applies in respect of the determination; and

(c)

unless the maximum prices in the determination are amended in accordance with Part 2, the maximum prices under the determination are those that applied immediately before the copper review date.

(6)

In this section, copper review date for a service means the date on which the Commission completes, in relation to the service,—

(a)

the investigation referred to in section 69AH(1)(a); or

(b)

any other investigation under Schedule 3 that starts on or after 1 January 2020.

Subpart 4—Investigation

69AH Schedule 3 modified for investigation of certain copper services

(1)

Despite clause 1 of Schedule 3, the Commission must—

(a)

complete, by no later than 31 December 2025, an investigation under Part 1 of Schedule 3 into whether Schedule 1 should be altered in any of the ways set out in section 66 or 67 in respect of the regulation of the following:

(i)

copper fixed line access services:

(ii)

Chorus’s unbundled bitstream access backhaul:

(iii)

Chorus’s unbundled copper local loop network co-location:

(iv)

Chorus’s unbundled copper local loop network backhaul (telephone exchange to interconnect point); or

(b)

provide, within a reasonable time after 31 December 2025, written reasons why there were not reasonable grounds for starting such an investigation.

(2)

An investigation referred to in subsection (1)(a) must be completed in accordance with Part 1 of Schedule 3, except that the 240-working-days deadline referred to in clause 4(1) of Schedule 3 does not apply to the investigation.

8 Section 69XA amended (Interpretation)

(1)

In section 69XA, definition of relevant regulated services, after “access services”, insert “except if those services are services in relation to which the end-user’s building (or, where relevant, the building’s distribution frame) is located in a specified fibre area”.

(2)

In section 69XA, definition of relevant services, replace paragraph (b) with:

(b)

does not include—

(i)

any services that are agreed by the Commission in writing to be legacy input services, being inputs to services that are no longer offered to end-users other than customers who were end-users before separation day; or

(ii)

any services in relation to which the end-user’s building (or, where relevant, the building’s distribution frame) is located in a specified fibre area

9 Section 157 amended (Regulations)

After section 157(ch), insert:

(ci)

prescribing matters for the purposes of the copper withdrawal code:

10 Schedule 1AA amended

In Schedule 1AA, after Part 1, insert the Part 2 set out in Schedule 1 of this Act.

11 Schedule 1 amended

Amend Schedule 1 as set out in Schedule 2 of this Act.

12 New Schedule 2A inserted

After Schedule 2, insert the Schedule 2A set out in Schedule 3 of this Act.

13 Schedule 3 amended

(1)

In Schedule 3, repeal clause 1(4).

(2)

In Schedule 3, clause 1(7), replace “section 156AP” with sections 69AH, 156AP, and 209.

(3)

In Schedule 3, after clause 1(7), insert:

(8)

Subclause (3) does not apply in relation to copper fixed line access services.

(4)

In Schedule 3, clause 3(1), replace “must make reasonable efforts to” with “may”.

(5)

In Schedule 3, repeal clause 3(3).

(6)

In Schedule 3, clause 4(1), replace “make reasonable efforts to do the following things not later than 120 working days” with “do the following things not later than 240 working days”.

(7)

In Schedule 3, after clause 4(4), insert:

(4A)

A failure by the Commission to comply with subclause (1) does not invalidate a final report prepared by the Commission.

(8)

In Schedule 3, repeal clause 5.

(9)

In Schedule 3, clause 7(1)(a), replace “at the end” with “after the end”.

(10)

In Schedule 3, clause 7(1)(b), replace “at the end” with “after the end”.

(11)

In Schedule 3, clause 10(1), replace “must make reasonable efforts to” with “may”.

(12)

In Schedule 3, clause 11(1), replace “make reasonable efforts to do the following things not later than 60 working days” with “do the following things not later than 120 working days”.

(13)

In Schedule 3, after clause 11(4), insert:

(5)

A failure by the Commission to comply with subclause (1) does not invalidate a final report prepared by the Commission.

(14)

In Schedule 3, repeal clause 12.

14 Schedule 3A amended

(1)

In Schedule 3A, clause 5(2), delete “after the Commission has made a recommendation under clause 3(2) in respect of that undertaking”.

(2)

In Schedule 3A, after clause 13(2), insert:

(3)

An access provider must not make more than 1 application in relation to a proposed regulatory change.

(3)

In Schedule 3A, repeal clause 16(3).

Part 2 Amendments related to fibre fixed line access services

15 Section 10 amended (Performance of Commission’s functions)

(1)

After section 10(1)(a)(iv), insert:

(v)

make every determination in respect of fibre fixed line access services under Part 6; and

(2)

In section 10(1)(c)(ii), after “make 2”, insert “or more”.

(3)

In section 10(1)(c)(ii), replace “and 2 other” with “and those other”.

16 Section 11 amended (Levy)

In section 11(1), (2), and (3)(d), replace “financial year” with “appropriation period” in each place.

17 Section 12 amended (Levy for first financial year or part financial year)

(1)

In the heading to section 12, replace financial year with appropriation period in each place.

(2)

Repeal section 12(1), (2), and (3).

(3)

After section 12(3), insert:

(3A)

Every service provider, or class of service providers, specified in regulations made under subsection (4) must pay to the Minister, for the first appropriation period or part appropriation period (as the case may require) after the date on which section 23 of the Telecommunications (New Regulatory Framework) Amendment Act 2017 comes into force, a levy of an amount stated in, or calculated or set or reset in accordance with, those regulations for, or in connection with,—

(a)

the preparation of the performance of, and the performance of, the Commission’s functions and duties under Part 6; and

(b)

the preparation of the exercise of, and the exercise of, the Commission’s powers under Part 6.

(3B)

Subsection (3A) applies irrespective of the fact that the regulations are made and come into effect after the date on which the relevant first appropriation period or part appropriation period commences.

(4)

In section 12(4)(d), replace “financial year” with “appropriation period” in each place.

(5)

After section 12(4), insert:

(5)

The Minister must not recommend that regulations be made under this section unless the Minister is satisfied that the levy will not require a service provider, or a class of service providers, to pay a levy in respect of the same period under both this section and section 11 for, or in connection with,—

(a)

the performance of the Commission’s functions and duties under Part 6; or

(b)

the exercise of the Commission’s powers under Part 6.

18 Section 15 amended (Application of Commerce Act 1986 and Crown Entities Act 2004)

In section 15, insert as subsections (2) and (3):

(2)

The following provisions of the Commerce Act 1986 apply, with any necessary modifications, as specified in Part 6 of this Act:

(a)

section 77 (additional lay members of High Court for purposes of appellate jurisdiction in respect of Commission determinations):

(b)

sections 88, 88A, and 90:

(c)

sections 93 to 97:

(d)

Schedule 5.

(3)

Sections 88 and 88A of the Commerce Act 1986 also apply, with any necessary modifications, as specified in section 156MD.

19 Section 19A amended (Commission to have regard to economic policies of Government)

In section 19A(1), after “powers under”, insert Part 6 and”.

20 Section 156AB amended (Interpretation)

(1)

In section 156AB, definition of non-discrimination, after “means”, insert “(except in subpart 4)”.

(2)

In section 156AB, definition of non-discrimination, delete “, or, where the service provider supplies itself with a relevant service, must not treat itself differently from other access seekers,”.

21 New section 156ANA inserted (Amendment or consolidation of undertaking)

After section 156AN, insert:

156ANA Amendment or consolidation of undertaking

(1)

The Minister may approve 1 or both of the following:

(a)

an amendment to an undertaking, if the amendment is necessary or desirable for the purpose of making the undertaking consistent with this Act:

(b)

the consolidation of 2 or more undertakings.

(2)

Sections 156AI to 156AK apply, with any necessary modifications, to an amendment or a consolidation as if it were an undertaking.

22 Section 156AX amended (Interpretation of this subpart)

In section 156AX, insert in its appropriate alphabetical order:

non-discrimination, in relation to the supply of a relevant service, means that the service provider must not treat access seekers differently, or, where the service provider supplies itself with a relevant service, must not treat itself differently from other access seekers, except to the extent that a particular difference in treatment is objectively justifiable and does not harm, and is unlikely to harm, competition in any telecommunications market

23 New Part 6 inserted

After section 161, insert:

Part 6 Fibre fixed line access services

Subpart 1—General

162 Purpose

The purpose of this Part is to promote the long-term benefit of end-users in markets for fibre fixed line access services by promoting outcomes that are consistent with outcomes produced in workably competitive markets so that regulated fibre service providers—

(a)

have incentives to innovate and to invest, including in replacement, upgraded, and new assets; and

(b)

have incentives to improve efficiency and supply fibre fixed line access services of a quality that reflects end-user demands; and

(c)

allow end-users to share the benefits of efficiency gains in the supply of fibre fixed line access services, including through lower prices; and

(d)

are limited in their ability to extract excessive profits.

Compare: 1986 No 5 s 52A

163 Overview

(1)

In this Part,—

(a)

subpart 1 contains general provisions and defines terms used in this Part:

(b)

subpart 2 sets out the different types of regulation that apply under this Part and provides for the Commission to make determinations specifying how each type of regulation applies to regulated fibre service providers:

(c)

subpart 3 relates to input methodologies and provides for the Commission to determine input methodologies applying to the regulation of fibre fixed line access services:

(d)

subpart 4 relates to information disclosure regulation and provides that certain regulated fibre service providers are required to disclose information in accordance with requirements determined by the Commission:

(e)

subpart 5 relates to price-quality regulation and provides that certain regulated fibre service providers are required to apply the price-quality paths determined by the Commission:

(f)

subpart 6 contains provisions relating to the duration of regulatory periods:

(g)

subpart 7 relates to the Commission carrying out reviews related to the regulatory framework for fibre fixed line access services:

(h)

subpart 8 contains enforcement provisions and miscellaneous provisions relating to the powers of the Commission, incorporation of material by reference, and the disclosure of commercially sensitive information:

(i)

subpart 9 contains appeal rights:

(j)

subpart 10 contains order-making and regulation-making powers related to this Part.

(2)

This section is intended only as a guide to the general scheme and effect of this Part.

Compare: 1986 No 5 ss 52, 52B

164 Interpretation

In this Part, unless the context otherwise requires,—

anchor service means a fibre fixed line access service prescribed in regulations made under section 223 to be an anchor service

claw-back has the meaning set out in section 165

contract price, in relation to a service, means the maximum price that may be charged for providing the service in accordance with the contracts between Crown Fibre Holdings Limited and UFB partners that were entered into as part of the UFB initiative

direct fibre access service or DFAS means a fibre fixed line access service prescribed in regulations made under section 224 to be a direct fibre access service

first regulatory period has the meaning set out in section 205

information disclosure requirement means a requirement that—

(a)

applies to a regulated fibre service provider who is prescribed in regulations as being subject to information disclosure regulation; and

(b)

is specified in a section 170 determination

input methodology means a description of any methodology, process, rule, or matter that includes any of the matters listed in section 175 and that is published by the Commission under section 179

price

(a)

means 1 or more of individual prices, aggregate prices, or revenues (whether in the form of specific numbers, or in the form of formulas by which specific numbers are derived); and

(b)

includes any related terms of payment

publicly disclose, in relation to information required to be disclosed under information disclosure regulation, means to disclose information to the public in the manner required by a section 170 determination

quality dimensions means relevant aspects of measures of the quality of fibre fixed line access services, as set out in an input methodology, and may include (without limitation) responsiveness to access seekers and end-users

section 170 determination means a determination made by the Commission under section 170 that sets out how information disclosure regulation or price-quality regulation applies to a regulated fibre service provider

UFB initiative has the meaning set out in section 156AB

UFB partner has the meaning set out in section 156AB

unbundled fibre service means a point-to-multipoint layer 1 service (as defined in section 156AB), but subject to the specifications and conditions for the service (if any) prescribed in regulations made under section 225.

165 Meaning and application of claw-back

(1)

A reference to the Commission applying claw-back is a reference to the Commission doing either of the following:

(a)

requiring a regulated fibre service provider to lower its prices on a temporary basis in order to allow end-users to be compensated for some or all of any over-recovery that occurred under the prices previously charged by the regulated fibre service provider:

(b)

allowing a regulated fibre service provider to recover some or all of any shortfall in its revenues that occurred under the prices previously charged by the regulated fibre service provider.

(2)

If the Commission requires a regulated fibre service provider to lower its prices, it must also require that the lowering of prices must be spread over time in order to minimise undue financial hardship to the regulated fibre service provider.

(3)

If the Commission allows a regulated fibre service provider to recover any shortfall, it must require that any recovery must be spread over time in order to minimise price shocks to end-users.

Compare: 1986 No 5 s 52D

166 Commission and Minister must consider purpose set out in section 162

If the Commission or the Minister (as the case may be) is required under this Part to make a recommendation, determination, or decision, the Commission or the Minister must—

(a)

consider the purpose in section 162; and

(b)

make the recommendation, determination, or decision that the Commission or Minister considers best gives, or is likely to best give, effect to that purpose.

Compare: 2001 No 103 s 19

Subpart 2—Regulating fibre fixed line access services

167 Regulation of fibre fixed line access services

(1)

Fibre fixed line access services are regulated as provided for by this Part.

(2)

A regulated fibre service provider must comply with—

(a)

the requirements of this Part that apply to the regulated fibre service provider; and

(b)

every section 170 determination that applies to the regulated fibre service provider.

(3)

The following apply in relation to a regulated fibre service provider on and after the date on which the provider is obliged to comply with this Part or (as the case requires) with a section 170 determination:

(a)

sections 210 to 216; and

(b)

sections 88, 88A, and 90 of the Commerce Act (applied with any necessary modifications).

(4)

The Commission may exercise any of its powers under this Act for the purpose of monitoring compliance by regulated fibre service providers with regulation under this Part.

Compare: 1986 No 5 ss 52F, 54E

168 Information disclosure regulation

Fibre fixed line access services supplied by a regulated fibre service provider who is prescribed in regulations as being subject to information disclosure regulation are subject to information disclosure regulation under this Part (see subpart 4).

169 Price-quality regulation

Fibre fixed line access services supplied by a regulated fibre service provider who is prescribed in regulations as being subject to price-quality regulation are subject to price-quality regulation under this Part (see subpart 5).

170 Determinations by Commission under this section

(1)

The Commission must make determinations under this section specifying how 1 or both of the following apply to regulated fibre service providers:

(a)

information disclosure regulation:

(b)

price-quality regulation.

(2)

Determinations must be made in accordance with this Part.

(3)

Determinations must—

(a)

set out, for each type of regulation, the requirements that apply to each regulated fibre service provider; and

(b)

set out any time frames (including the regulatory periods) that must be complied with or that apply; and

(c)

specify the input methodologies that apply; and

(d)

be consistent with this Part.

(4)

It is not necessary for a single determination to address all matters relating to fibre fixed line access services, or to a regulated fibre service provider, and different parts of any determination may come into effect at different times.

(5)

A determination made under this section may require a regulated fibre service provider to comply with the requirements set out in any other determination that has been made under this section in respect of fibre fixed line access services.

(6)

The Commission must, as soon as practicable after making a determination under this section,—

(a)

give a copy of the determination to each regulated fibre service provider to whom the determination relates; and

(b)

publish a summary of it in the Gazette; and

(c)

give public notice of the whole determination.

(7)

A determination under this section is neither a legislative instrument nor a disallowable instrument for the purposes of the Legislation Act 2012 (and does not have to be presented to the House of Representatives under section 41 of that Act).

Compare: 1986 No 5 s 52P

171 When Commission must make initial section 170 determinations

(1)

The Commission must, after the date on which the relevant input methodologies are determined under section 177 but before the implementation date, make determinations under section 170 specifying—

(a)

how price-quality regulation applies to regulated fibre service providers during the first regulatory period; and

(b)

how information disclosure regulation applies to regulated fibre service providers from the start of the first regulatory period.

(2)

A section 170 determination relating to information disclosure regulation may last for more than 1 regulatory period and remains in force until it is amended.

172 Amendment of section 170 determination

(1)

A section 170 determination may be amended in a material way only after the Commission has consulted with interested parties, but may be amended in a non-material way without prior consultation.

(2)

An amendment forms part of the determination it amends.

(3)

An amendment comes into force on the date specified in the amendment, which must be a date on or after the date on which it, or a summary of it, is published in the Gazette.

(4)

The Commission must, as soon as practicable after making an amendment,—

(a)

give a copy of the amendment to each provider to whom the determination relates; and

(b)

publish the amendment, or a summary of the amendment, in the Gazette; and

(c)

give public notice of the determination, as amended by the amendment.

Compare: 1986 No 5 s 52Q

Subpart 3—Input methodologies

Input methodologies

173 Purpose of input methodologies

The purpose of input methodologies is to promote certainty for regulated fibre service providers, access seekers, and end-users in relation to the rules, requirements, and processes applying to the regulation, or proposed regulation, of fibre fixed line access services under this Part.

Compare: 1986 No 5 s 52R

174 How published input methodologies apply

A relevant input methodology relating to the supply of fibre fixed line access services that is published under section 179 must be applied—

(a)

by each relevant regulated fibre service provider in accordance with the relevant section 170 determination; and

(b)

by each person entitled or required under this Act to recommend, decide, or determine—

(i)

how regulation under this Part should apply to fibre fixed line access services; or

(ii)

the prices or quality standards applying to fibre fixed line access services.

Compare: 1986 No 5 s 52S

175 Matters covered by input methodologies

(1)

The input methodologies relating to fibre fixed line access services must include, to the extent applicable to the type of regulation under consideration,—

(a)

methodologies for evaluating or determining the following matters in respect of the supply of the fibre fixed line access services:

(i)

cost of capital:

(ii)

valuation of assets, including depreciation, and treatment of revaluations:

(iii)

allocation of common costs, including between activities, businesses, access seekers, regulated services, and geographic areas:

(iv)

treatment of taxation; and

(b)

quality dimensions; and

(c)

regulatory processes and rules, such as—

(i)

the specification and definition of prices, including identifying any costs that can be passed through to prices (which may not include the legal costs of any appeals against input methodology determinations under this Part); and

(ii)

identifying circumstances in which a price-quality path may be reconsidered within a regulatory period; and

(d)

methodologies for capital expenditure projects, including the following:

(i)

requirements that must be met by the regulated fibre service provider, including the scope and specificity of information required, the extent of independent verification and audit, and the extent of consultation and agreement with other parties (including access seekers or end-users); and

(ii)

the criteria the Commission will use to evaluate capital expenditure proposals; and

(iii)

time frames and processes for evaluating capital expenditure proposals, including what happens if the Commission does not comply with those time frames.

(2)

Every input methodology must, as far as is reasonably practicable,—

(a)

set out the matters listed in subsection (1) in sufficient detail so that each affected regulated fibre service provider is reasonably able to estimate the material effects of the methodology on the provider; and

(b)

set out how the Commission intends to apply the input methodology to fibre fixed line access services; and

(c)

be consistent with the other input methodologies that relate to fibre fixed line access services.

(3)

Any methodologies referred to in subsection (1)(a)(ii) that relate to establishing the initial value of fibre assets (as defined in section 176) must be determined in accordance with section 176.

Compare: 1986 No 5 ss 52T, 54S

176 Initial value of fibre assets

(1)

The initial value of a fibre asset is calculated by—

(a)

taking the cost—

(i)

incurred by a regulated fibre service provider in constructing or acquiring the fibre asset, net of specified capital contributions; or

(ii)

if the fibre asset was owned by Chorus before 1 December 2011, recorded by Chorus for the fibre asset in its published general purpose financial statements as of 1 December 2011; and

(b)

adjusting that cost for accumulated depreciation and impairment losses (if any) recognised by the regulated fibre service provider (ignoring any accounting adjustment for Crown funding), as at the implementation date, under generally accepted accounting practice in New Zealand.

(2)

Each regulated fibre service provider is treated, as at the implementation date, as owning a fibre asset with an initial value equal to the financial losses, as determined by the Commission, incurred by the provider in providing fixed line access services under the UFB initiative for the period starting on 1 December 2011 and ending on the close of the day immediately before the implementation date.

(3)

To avoid doubt, the initial value of a fibre asset determined under this section includes the costs incurred by the provider in relation to the asset—

(a)

as a direct result of meeting specific requirements of the UFB initiative; and

(b)

for both standard and non-standard connections.

(4)

In this section,—

fibre asset means an asset constructed or acquired by a regulated fibre service provider—

(a)

to provide fibre fixed line access services; or

(b)

in the case of an asset constructed or acquired by Chorus on or after 1 December 2011, to provide fibre fixed line access services or other services

specified capital contribution means a capital contribution received by a regulated fibre service provider from 1 or more of the following:

(a)

an access seeker:

(b)

an end-user:

(c)

any other person, as determined by the Commission

standard connection and non-standard connection have the meanings set out in section 155ZU.

177 When input methodologies must be determined

(1)

The Commission must, not later than the implementation date, determine the input methodologies referred to in section 175 for fibre fixed line access services.

(2)

The Commission may, at any time after the implementation date, determine further input methodologies for fibre fixed line access services.

Compare: 1986 No 5 s 52U

178 Commission process for determining input methodologies

(1)

When the Commission begins work on an input methodology, it must publish a notice of intention to do so that—

(a)

outlines the process that will be followed; and

(b)

sets out the proposed time frames.

(2)

During the course of its work on an input methodology, the Commission—

(a)

must publish a draft methodology; and

(b)

must give interested persons a reasonable opportunity to give their views on that draft methodology; and

(c)

may hold 1 or more conferences; and

(d)

must have regard to any views received from interested persons within any time frames set.

(3)

Any work done or action taken (including any consultation) by the Commission on input methodologies before this section commences may be taken into account as part of the work required to be done by the Commission to comply with the requirements of subsections (1) and (2).

Compare: 1986 No 5 s 52V

179 Publication of input methodologies

(1)

The Commission must publish every input methodology, and every amendment to an input methodology,—

(a)

within 10 working days after the Commission determines the input methodology or amendment; and

(b)

if the input methodology or amendment is determined by the High Court on appeal, within 10 working days after the Commission receives a copy of the decision of the High Court.

(2)

The publication must be in a notice in the Gazette setting out—

(a)

a brief description of the nature of the methodology; and

(b)

the reasons for determining that methodology; and

(c)

how it is available to the public.

(3)

The Commission must give public notice of every input methodology, and every amended input methodology, as soon as the input methodology or amendment is published.

(4)

A published input methodology or amendment is neither a legislative instrument nor a disallowable instrument for the purposes of the Legislation Act 2012 (and does not have to be presented to the House of Representatives under section 41 of that Act).

Compare: 1986 No 5 s 52W

180 Changes to input methodologies

(1)

If the Commission proposes to amend an input methodology to make a material change, section 178 applies as if the amendment were a new input methodology.

(2)

The Commission may amend an input methodology to make a non-material change without complying with section 178.

(3)

If the Commission proposes to revoke an input methodology, sections 178 and 179 apply with any necessary modifications as if the revocation were a new input methodology.

Compare: 1986 No 5 s 52X

181 Review and date of publication of input methodologies

(1)

The Commission must review each input methodology no later than 7 years after its date of publication and, after that, at intervals of no more than 7 years.

(2)

The date of publication of an input methodology is the date on which it is published under section 179(1)(a) or, if it is subsequently published under section 179(1)(b), the date of that later publication.

(3)

Section 178 applies, with any necessary modifications, as if the review were a new input methodology.

(4)

Section 179 applies if, after a review, an input methodology is replaced, amended, or revoked.

Compare: 1986 No 5 s 52Y

Appeals against input methodology determinations

182 Appeals against input methodology determinations

(1)

Any person who gave views on an input methodology determination to the Commission as part of the process under section 178, and who, in the opinion of the High Court, has a significant interest in the matter, may appeal to the High Court against the determination.

(2)

In this section and section 183, input methodology determination means any of the following:

(a)

the initial determination of an input methodology:

(b)

any determination by the Commission that amends or revokes the input methodology:

(c)

any determination by the Commission of an input methodology after a review of the input methodology.

(3)

In determining an appeal against an input methodology determination, the court may do any of the following:

(a)

decline the appeal and confirm the input methodology, or the revocation of the input methodology, set out in the determination:

(b)

allow the appeal by—

(i)

amending the input methodology; or

(ii)

revoking the input methodology and substituting a new one; or

(iii)

referring the input methodology determination back to the Commission with directions as to the particular matters that require amendment; or

(iv)

if the revocation of an input methodology is not confirmed, confirming that the input methodology still applies.

(4)

The court may only exercise its powers under subsection (3)(b) if it is satisfied that the amended, substituted, or confirmed input methodology is (or will be, in the case of subsection (3)(b)(iii)) materially better in meeting the purpose of this Part, the purpose in section 173, or both.

(5)

If the court allows an appeal, the Commission may seek clarification from the court on any matter for the purpose of implementing the court’s decision.

(6)

There is a right of appeal under section 97 of the Commerce Act 1986 to the Court of Appeal from any decision or order of the High Court under this section on a point of law only.

Compare: 1986 No 5 s 52Z

183 Process for appeals

(1)

An appeal under section 182(1) must be brought within 20 working days after the date on which the input methodology determination is published.

(2)

The appeal must be by way of rehearing and must be conducted solely on the basis of the documentary information and views that were before the Commission when it made its determination, and no party may introduce any new material during the appeal.

(3)

The High Court must sit with 2 lay members (unless the court considers that only 1 is required).

(4)

Each of the lay members must have relevant experience and be appointed from the pool of people appointed under section 77 of the Commerce Act 1986 to be members of the court for the purpose of hearing the appeal.

(5)

Section 77 of the Commerce Act 1986 applies, and section 77(14) of that Act is not limited by subsection (3) of this section.

Compare: 1986 No 5 s 52ZA

184 Input methodology applies pending outcome of appeal

(1)

The High Court may not stay the application of section 174 with respect to any input methodology published under section 179 until any appeal against it is finally determined.

(2)

Section 174 continues to apply with respect to every input methodology published under section 179 until any appeal against the input methodology is finally determined.

Compare: 1986 No 5 s 53

Subpart 4—Information disclosure regulation

185 Purpose of information disclosure regulation

The purpose of information disclosure regulation is to ensure that sufficient information is readily available to interested persons to assess whether the purpose of this Part is being met.

Compare: 1986 No 5 s 53A

186 Effect of being subject to information disclosure regulation

(1)

A regulated fibre service provider who is subject to information disclosure regulation must—

(a)

publicly disclose information in accordance with the information disclosure requirements set out in the relevant section 170 determination; and

(b)

supply to the Commission a copy of all information disclosed in accordance with the section 170 determination, within 5 working days after the information is first made available to the public; and

(c)

supply to the Commission, in accordance with a written notice by the Commission, any further statements, reports, agreements, particulars, or other information required for the purpose of monitoring the regulated fibre service provider’s compliance with the section 170 determination.

(2)

If a regulated fibre service provider is subject to information disclosure regulation, the Commission—

(a)

may monitor and analyse all information disclosed in accordance with the information disclosure requirements; and

(b)

must, as soon as practicable after any information is publicly disclosed, publish a summary and an analysis of that information for the purpose of promoting greater understanding of the performance of individual regulated fibre service providers, their relative performance, changes in their performance over time, and their ability to extract excessive profits.

Compare: 1986 No 5 s 53B

187 Section 170 determination to set out information disclosure requirements

(1)

A section 170 determination relating to fibre fixed line access services that are subject to information disclosure regulation must specify the following:

(a)

the regulated fibre service providers to which it applies:

(b)

the information to be disclosed:

(c)

the manner in which the information is to be disclosed:

(d)

the form of disclosure:

(e)

when, and for how long, information must be disclosed:

(f)

the input methodologies that apply:

(g)

any other methodologies that are required in the preparation or compilation of the information.

(2)

Information required to be disclosed may include (without limitation) 1 or more of the following:

(a)

financial statements (including projected financial statements):

(b)

asset values and valuation reports:

(c)

prices, terms and conditions relating to prices, and pricing methodologies:

(d)

contracts:

(e)

transactions with related parties:

(f)

financial and non-financial performance measures:

(g)

plans and forecasts, including (without limitation) plans and forecasts about demand, investments, prices, revenues, quality and service levels, capacity and spare capacity, and efficiency improvements:

(h)

asset management plans:

(i)

quality performance measures and statistics:

(j)

assumptions, policies, and methodologies used or applied in these or other areas:

(k)

consolidated information that includes information about unregulated services, in which case section 188 applies:

(l)

information related to 1 or more parts of a fibre network.

(3)

The section 170 determination may do 1 or more of the following:

(a)

require disclosed information, or information from which disclosed information is derived (in whole or in part), to be verified by statutory declaration:

(b)

require independent audits of disclosed information:

(c)

require the retention of data on which disclosed information is based, and associated documentation:

(d)

exempt any person or class of persons, or provide for exemptions, from any requirements of the determination, and provide for the revocation of exemptions:

(e)

provide for transitional provisions:

(f)

impose any other requirements that the Commission considers necessary or desirable to promote the purpose of information disclosure regulation.

(4)

The section 170 determination may not require a regulated fibre service provider to publicly disclose any provision of an existing contract that, immediately before the fibre fixed line access services became subject to information disclosure regulation, was not required by or under any other enactment to be publicly disclosed.

Compare: 1986 No 5 s 53C

188 Consolidated information may also be required

(1)

The purpose of this section is to enable the Commission to monitor compliance with information disclosure regulation applying to fibre fixed line access services.

(2)

A section 170 determination may require information referred to in subsection (3) to be disclosed only to the extent required to enable the purpose in subsection (1) to be met.

(3)

If a regulated fibre service provider provides services that are not subject to regulation under this Part (other services), the provider may be required to disclose—

(a)

consolidated financial statements, and any other information referred to in section 187, for all businesses (including those related to the supply of other services) undertaken by that provider; and

(b)

consolidated financial statements, and any other information referred to in section 187, for the supply of all other services in aggregate; and

(c)

reconciliation of information provided under paragraphs (a) and (b) with information disclosed in accordance with information disclosure requirements applying to the fibre fixed line access services.

Compare: 1986 No 5 s 53D

189 Charge for providing copies to public

(1)

A person who is required, by a section 170 determination, to provide copies of statements and information to the public on request may charge for providing those copies.

(2)

The charge must be no more than is reasonably required to recover the costs of providing those copies.

Compare: 1986 No 5 s 53E

190 Limited exception to obligation to apply input methodologies

(1)

Despite section 174, a regulated fibre service provider who is subject only to information disclosure regulation does not have to apply the following input methodologies in accordance with that section:

(a)

methodologies for evaluating or determining the cost of capital:

(b)

quality dimensions.

(2)

However, to avoid doubt, subsection (1) does not affect anything else in this subpart, and in particular does not affect—

(a)

section 186(2) (which means the Commission may use the input methodologies referred to in subsection (1) to monitor and analyse information); and

(b)

section 187(2) (which means that a regulated fibre service provider may still be required to disclose information about the methodologies for evaluation or determining the cost of capital that it does in fact use).

Compare: 1986 No 5 s 53F

Subpart 5—Price-quality regulation

191 Purpose of price-quality regulation

The purpose of price-quality regulation is to regulate the price and quality of fibre fixed line access services provided by regulated fibre service providers.

Compare: 1986 No 5 s 53K

192 Effect of being subject to price-quality regulation

(1)

A regulated fibre service provider who is subject to price-quality regulation in respect of fibre fixed line access services must—

(a)

apply the price-quality paths set by the Commission in a section 170 determination in respect of those services; and

(b)

comply with sections 197 to 200.

(2)

For the purpose of monitoring compliance with this section, the Commission may, in addition to exercising its powers under section 98 of the Commerce Act 1986, issue a written notice to a regulated fibre service provider requiring it to provide any or all of the following:

(a)

a written statement that states whether the provider has complied with the price-quality paths applying to that provider:

(b)

a report on the written statement referred to in paragraph (a) that is signed by an auditor in accordance with any form specified by the Commission:

(c)

sufficient information to enable the Commission to properly determine whether a price-quality path has been complied with:

(d)

a certificate, in the form specified by the Commission and signed by at least 1 director of the provider, confirming the truth and accuracy of any information provided under this section.

Compare: 1986 No 5 ss 53L, 53N

193 Section 170 determination to set out price-quality path requirements

(1)

A section 170 determination relating to fibre fixed line access services that are subject to price-quality regulation must specify the price-quality paths that apply to a regulated fibre service provider.

(2)

A price-quality path must specify the following:

(a)

the regulatory period to which it applies:

(b)

in relation to prices, 1 or both of the following:

(i)

the maximum price or prices that may be charged by a regulated fibre service provider:

(ii)

the maximum revenues that may be recovered by a regulated fibre service provider:

(c)

the quality standards that must be met by a regulated fibre service provider:

(d)

the date or dates on which the price-quality path (or any part of it) takes effect:

(e)

the date or dates by which compliance must be demonstrated in accordance with section 192.

(3)

A price-quality path may include incentives for a regulated fibre service provider to maintain or improve its quality of supply, and those incentives may include (without limitation) any of the following:

(a)

penalties by way of a reduction in the provider’s maximum prices or revenues based on whether, or by what amount, the provider fails to meet the required quality standards:

(b)

rewards by way of an increase in the provider’s maximum prices or revenues based on whether, or by what amount, the provider meets or exceeds the required quality standards:

(c)

compensation schemes that set minimum standards of performance and require the provider to pay prescribed amounts of compensation if it fails to meet those standards:

(d)

reporting requirements, including special reporting requirements in asset management plans, if the provider fails to meet the quality standards.

(4)

Quality standards may, subject to any relevant input methodologies, be prescribed in any way the Commission considers appropriate (such as targets, bands, or formulas).

(5)

A price-quality path does not apply to a regulated fibre service provider until the date specified in the relevant section 170 determination.

Compare: 53M, 53O

194 Maximum revenues specified in initial price-quality paths

(1)

Despite section 193(2)(b), the Commission must, in the price-quality paths for each regulatory period that starts before the reset date,—

(a)

specify the maximum revenues that may be recovered by a regulated fibre service provider; and

(b)

not specify the maximum price or prices that may be charged by a regulated fibre service provider.

(2)

In this section and section 195, reset date means the date declared, in an order made under section 221, to be the reset date.

195 Wash-up mechanism for maximum revenues specified in initial price-quality paths

(1)

This section applies when the Commission specifies, in the price-quality paths for each regulatory period that starts before the reset date (except the first regulatory period), the maximum revenues that may be recovered by a regulated fibre service.

(2)

The Commission must, in calculating the maximum revenues, apply a wash-up mechanism that provides for any over-recovery or under-recovery of revenue by the regulated fibre service provider during the previous regulatory period to be applied in a manner that is equivalent in present value terms over 1 or more future regulatory periods.

(3)

To avoid doubt, the Commission may, but is not required to, apply the wash-up mechanism referred to in subsection (2) in a price-quality path for a regulatory period that starts on or after the reset date.

196 Smoothing revenues and prices

(1)

This section applies when the Commission specifies maximum prices or maximum revenues for the purpose of section 193(2)(b).

(2)

The Commission must calculate the maximum price or revenue in a manner that is equivalent in present value terms over 2 or more regulatory periods (for example, by altering depreciation) if, in the Commission’s opinion, it is necessary or desirable to do so to minimise any undue financial hardship to a regulated fibre service provider or to minimise price shocks to end-users.

197 Anchor services

A regulated fibre service provider who is subject to price-quality regulation must, during the prescribed period for an anchor service, provide the anchor service—

(a)

in respect of any premises, building, or access point connected to its fibre network; and

(b)

at a price that is no greater than the prescribed maximum price; and

(c)

in accordance with any prescribed conditions.

198 Direct fibre access services

A regulated fibre service provider who is subject to price-quality regulation must, during the prescribed period for a direct fibre access service, provide the direct fibre access service—

(a)

in respect of any premises, building, or access point connected to its fibre network; and

(b)

at a price that is no greater than the prescribed maximum price; and

(c)

in accordance with any prescribed conditions.

199 Unbundled fibre services

A regulated fibre service provider who is subject to price-quality regulation must, during the prescribed period for an unbundled fibre service, provide the unbundled fibre service—

(a)

in respect of any premises, building, or access point connected to its fibre network; and

(b)

at a price that is no greater than the prescribed maximum price (if any); and

(c)

in accordance with any prescribed conditions.

200 Geographically consistent pricing

A regulated fibre service provider who is subject to price-quality regulation must, regardless of the geographic location of the access seeker or end-user, charge the same price for providing fibre fixed line access services that are, in all material respects, the same.

201 Making new section 170 determination

(1)

Before the end of each regulatory period, the Commission must make a new section 170 determination specifying the price-quality paths that will apply for the following regulatory period.

(2)

In making a new section 170 determination, the Commission must consult with interested parties in relation to the requirements listed in section 193.

Compare: 1986 No 5 s 53P

202 What happens to price-quality path if input methodologies change

(1)

A price-quality path may not be reopened within a regulatory period on the grounds of a change in an input methodology, except as provided in subsection (2).

(2)

A price-quality path must be reopened by the Commission, and a new price-quality path made by amending the relevant section 170 determination in accordance with section 172, if—

(a)

an input methodology changes as a result of an appeal under section 182; and

(b)

had the changed methodology applied at the time the price-quality path was set, it would have resulted in a materially different path being set.

(3)

When making a new price-quality path under subsection (2), the Commission must apply claw-back.

Compare: 1986 No 5 s 53ZB

203 Application of Commerce Act 1986

Part 2 of the Commerce Act 1986 does not apply in respect of—

(a)

a price for a fibre fixed line access service provided by a regulated fibre service provider if—

(i)

that service is subject to an individually specified maximum price set under this Part (whether in this Act, in regulations made under this Act, or by the Commission in a section 170 determination); and

(ii)

the price complies with the individually specified maximum price; and

(b)

any matter necessary for giving effect to the specified maximum price referred to in paragraph (a).

204 Modification of undertakings under section 156AD

Despite any undertaking entered into by a regulated fibre service provider in accordance with section 156AD(2)(c), a regulated fibre service provider is not required, on and after the implementation date, to achieve price equivalence in relation to the supply of an unbundled layer 1 service (as defined in section 155ZS) if—

(a)

the service is subject to an individually specified maximum price under this Part (whether in this Act, in regulations made under this Act, or by the Commission in a section 170 determination); or

(b)

the service is an input to a service referred to in paragraph (a).

Subpart 6—Regulatory periods

205 Regulatory periods

(1)

The first regulatory period starts on the implementation date and lasts for a period of 3 years.

(2)

The duration of subsequent regulatory periods must be determined by the Commission and must be between 3 and 5 years.

(3)

The Commission must notify the duration of each new regulatory period in a section 170 determination.

Subpart 7—Reviews

206 Anchor services review

(1)

The Commission may, before the start of each regulatory period (including the first regulatory period), review whether, and how effectively, an anchor service meets the purpose of anchor services in subsection (7).

(2)

A review must consider the following in respect of an anchor service:

(a)

the specification of the service:

(b)

the prescribed conditions that apply to the service:

(c)

the prescribed period for the service:

(d)

the prescribed maximum price for the service.

(3)

The Commission must give interested persons a reasonable opportunity to give their views on the matters subject to review and the Commission must have regard to any views received.

(4)

The Commission must make a recommendation to the Minister after a review for the purposes of section 223.

(5)

The Commission must not recommend a change to the specification of an anchor service unless the service (with the amended specification) meets the purpose in subsection (7).

(6)

The Commission must not recommend a change to the prescribed maximum price of an anchor service unless,—

(a)

if the recommendation is made before the start of the first regulatory period, the maximum price is based on the contract price for the service immediately before the implementation date, with an annual CPI adjustment mechanism; and

(b)

if the recommendation is made after the start of the first regulatory period, the maximum price is a cost-based price.

(7)

The purpose of anchor services is—

(a)

to ensure that baseband equivalent voice and basic broadband services are available to end-users at reasonable prices; and

(b)

to provide a reference to act as an appropriate constraint on the price and quality of other fibre fixed line access services.

207 Price-quality review

(1)

The Commission may, on or after the date that is 3 years after the implementation date and at intervals of no less than 5 years thereafter, review how effectively the regulatory provisions in sections 194, 198, and 199 meet the purpose in section 162.

(2)

A review must consider 1 or more of the following:

(a)

whether price-quality paths should, with effect from the start of a future regulatory period, continue to be required to specify the maximum revenues that may be recovered by a regulated fibre service provider (see sections 194 and 195):

(b)

whether the prescribed period for an unbundled fibre service or a direct fibre access service should be amended:

(c)

whether the prescribed maximum price for a direct fibre access service should be amended:

(d)

whether a maximum price should be prescribed for an unbundled fibre service and, if so, what the price should be:

(e)

whether the prescribed maximum price (if any) for an unbundled fibre service should be amended.

(3)

The Commission must give interested persons a reasonable opportunity to give their views on the matters subject to review and the Commission must have regard to any views received.

(4)

The Commission must make a recommendation to the Minister following a review for the purposes of sections 221, 224, or 225 (as appropriate).

(5)

The Commission must not recommend a prescribed maximum price for an unbundled fibre service or a direct fibre access service unless the maximum price is a cost-based price.

208 Deregulation review

(1)

The Commission may, at any time after the implementation date, review how fibre fixed line access services should be regulated under this Part if the Commission has reasonable grounds to consider that fibre fixed line access services—

(a)

should no longer be regulated under this Part; or

(b)

should no longer be subject to price-quality regulation under this Part.

(2)

The Commission must, before the start of each regulatory period (except the first regulatory period), consider whether there are reasonable grounds to start a review.

(3)

A review may consider the following:

(a)

whether competition to fibre fixed line access services has emerged in a relevant market:

(b)

whether any competition referred to in paragraph (a) exercises an effective constraint on the ability of regulated fibre service providers to exercise substantial market power:

(c)

whether the purpose of this Part would be better met if fibre fixed line access services were no longer subject to price-quality regulation.

(4)

The Commission must give interested persons a reasonable opportunity to give their views on the matters subject to review and the Commission must have regard to any views received.

(5)

The Commission must make a recommendation to the Minister after a review.

209 Application of Schedule 3

Despite clause 1 of Schedule 3, the Commission must not commence an investigation under Schedule 3 in relation to fibre fixed line access services.

Subpart 8—Enforcement and miscellaneous provisions

210 Pecuniary penalty for contravening information disclosure requirement

(1)

The High Court may, on application by the Commission, order any person to pay a pecuniary penalty to the Crown if the court is satisfied that the person—

(a)

has contravened any information disclosure requirement (as defined in section 164); or

(b)

has attempted to contravene any such requirement; or

(c)

has aided, abetted, counselled, or procured any other person to contravene any such requirement; or

(d)

has induced, or attempted to induce, any other person, whether by threats or promises or otherwise, to contravene any such requirement; or

(e)

has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by any other person of any such requirement; or

(f)

has conspired with any other person to contravene any such requirement.

(2)

In subsection (1) and section 212, a reference to contravening an information disclosure requirement includes all or any of the following:

(a)

failing to disclose information required to be disclosed:

(b)

failing to disclose information in the form or within the time required:

(c)

disclosing information under an information disclosure requirement that is false or misleading.

(3)

The amount of pecuniary penalty must not, in respect of each act or omission, exceed $500,000 in the case of an individual, or $5,000,000 in the case of a body corporate.

(4)

In determining the amount of pecuniary penalty, the court must have regard to all relevant matters, including—

(a)

the nature and extent of the contravention; and

(b)

the circumstances in which the contravention took place (including whether the contravention was intentional, inadvertent, or caused by negligence); and

(c)

whether the person has previously been found by the court in proceedings under this Part to have engaged in similar conduct.

(5)

A regulated fibre service provider may not be liable to more than 1 pecuniary penalty in respect of the same conduct.

(6)

Proceedings under this section may be commenced at any time within 3 years after the contravention occurred.

Compare: 1986 No 5 s 86

211 Order requiring information disclosure requirement to be complied with

(1)

The High Court may, on application by the Commission, order a regulated fibre service provider to comply with an information disclosure requirement that applies to the provider.

(2)

An order under this section must specify the date by which, or period within which, the provider must comply with the requirement.

Compare: 1986 No 5 s 86A

212 Offences relating to information disclosure regulation

(1)

A person commits an offence if—

(a)

the person, knowing that particular fibre fixed line access services are subject to information disclosure regulation, intentionally contravenes any information disclosure requirement relating to those services; or

(b)

the person is subject to an order under section 211 and fails to comply with the order by the date, or within the period, specified.

(2)

A person who commits an offence under subsection (1) is liable on conviction to a fine not exceeding $200,000 in the case of an individual, or $1,000,000 in the case of a body corporate.

Compare: 1986 No 5 s 86B

213 Pecuniary penalty for contravening price-quality requirements

(1)

The High Court may, on application by the Commission, order a person to pay a pecuniary penalty to the Crown if the court is satisfied that the person—

(a)

has contravened any price-quality requirement applying to fibre fixed line access services; or

(b)

has attempted to contravene any such requirement; or

(c)

has aided, abetted, counselled, or procured any other person to contravene any such requirement; or

(d)

has induced, or attempted to induce, any other person, whether by threats or promises or otherwise, to contravene any such requirement; or

(e)

has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by any other person of any such requirement; or

(f)

has conspired with any other person to contravene any such requirement.

(2)

In subsection (1) and sections 214 to 216, a reference to contravening a price-quality requirement

(a)

refers to a requirement imposed—

(i)

by a determination made under section 170 in relation to fibre fixed line services that are subject to price-quality regulation imposed under Part 6; or

(ii)

by section 192(1)(b); and

(b)

includes 1 or more of the following:

(i)

failing to comply with a requirement for prices, whether by charging a price for a service that is higher than the maximum price permitted, or by receiving more revenue than is permitted, or in any other way:

(ii)

failing to comply with any quality standards required under the price-quality regulation:

(iii)

failing to comply with any requirement in sections 197 to 200.

(3)

The amount of pecuniary penalty must not, in respect of each act or omission, exceed $500,000 in the case of an individual, or $10,000,000 in the case of a body corporate.

(4)

In setting the amount of pecuniary penalty, the court must take into account all of the following matters:

(a)

the nature and extent of the contravention:

(b)

the nature and extent of any loss or damage suffered by any person as a result of the contravention:

(c)

the circumstances in which the contravention took place (including whether the contravention was intentional, inadvertent, or caused by negligence):

(d)

whether or not the person has previously been found by the court in proceedings under this Part to have engaged in similar conduct.

(5)

A regulated fibre service provider may not be liable to more than 1 pecuniary penalty in respect of the same conduct.

(6)

Proceedings under this section may be commenced at any time within 3 years after the contravention occurred.

Compare: 1986 No 5 s 87

214 Compensation for contravention of price-quality requirement

(1)

If the High Court orders a person to pay a pecuniary penalty under section 213 in respect of the contravention of a price-quality requirement, the court may, in addition, order the person to pay compensation to any person who has suffered, or is likely to suffer, loss or damage as a result of the contravention (an aggrieved person).

(2)

An application for an order under this section may be made by the Commission or any aggrieved person.

(3)

The application must be made within 1 year of the date of the pecuniary penalty order.

(4)

The court may make an order under this section whether or not any aggrieved person is party to the proceedings.

(5)

In proceedings under this section, the court may make such orders as to cost as it thinks fit.

Compare: 1986 No 5 s 87A

215 Offence relating to price-quality regulation

(1)

A person commits an offence if—

(a)

the person, knowing that particular fibre fixed line access services are subject to price-quality regulation, intentionally contravenes a price-quality requirement in respect of the services; or

(b)

the person is subject to an order under section 216(1)(b) and fails to comply with the order.

(2)

A person who commits an offence under subsection (1) is liable on conviction to a fine not exceeding $200,000 in the case of an individual, or $1,000,000 in the case of a body corporate.

Compare: 1986 No 5 s 87B

216 Injunction and other orders relating to price-quality regulation

(1)

If the High Court is satisfied that fibre fixed line access services that are subject to price-quality regulation are being provided, or are likely to be provided, in contravention of any price-quality requirement applying with respect to those services, the court may do 1 or both of the following:

(a)

grant an injunction restraining any provider of those services from providing them in contravention of the price-quality requirement:

(b)

requiring the provider to provide the services in accordance with the price-quality requirement applying to them.

(2)

An application for an order under this section may be made by any person.

Compare: 1986 No 5 s 87C

217 Powers of Commission under this Part

(1)

For the purpose of carrying out its functions and exercising its powers under this Part, the Commission may, in addition to exercising its powers under this Act and section 98 of the Commerce Act 1986, do any of the following:

(a)

consult with any person the Commission considers may assist it:

(b)

investigate any of the following:

(i)

how effectively and efficiently a regulated fibre service provider is providing fibre fixed line access services:

(ii)

how any formula, methodology, or price-quality path being considered by the Commission may be applied, or how any formula, methodology, or price-quality provision determined or authorised by the Commission has been applied, in considering proposed prices, revenue, or quality standards:

(iii)

how any conditions relating to the quality of fibre fixed line access services may be, or are being, fulfilled:

(c)

examine, consider, or investigate any activity, cost, revenue, transfer, asset valuation, circumstance, or event that is occurring or that has occurred during the previous 7 years:

(d)

use any information previously disclosed to the Commission under this Act or the Commerce Act 1986:

(e)

by notice in writing, require any regulated fibre service provider—

(i)

to prepare and produce forecasts, forward plans, or other information; and

(ii)

to apply any methodology specified by the Commission in the preparation of forecasts, forward plans, or other information:

(f)

by notice in writing, require any specified person who the Commission has reason to believe may have information or documents relevant to the investigation, audit, or inquiry, at the time and place specified in the notice, to do 1 or both of the following:

(i)

produce or supply to the Commission documents and information in relation to the fibre fixed line access services, or the prices or operations of the person in respect of the services:

(ii)

answer any questions about any matter that the Commission has reason to believe may be relevant to the investigation, audit, or inquiry:

(g)

by notice in writing, require any regulated fibre service provider, at the time and place specified in the notice, to produce or supply to the Commission an expert opinion from an appropriately qualified person, or from a member of a class of appropriately qualified persons, as determined by the Commission in relation to the matters in paragraph (b), (c), (e), or (f)(i).

(2)

In this section, specified person means any of the following:

(a)

a regulated fibre service provider:

(b)

a person who used to be a regulated fibre service provider:

(c)

a retail service provider:

(d)

an agency associated with the supply of fibre fixed line access services.

Compare: 1986 No 5 s 53ZD

218 Power to exempt disclosure of commercially sensitive information

(1)

The Commission may, on application, exempt any person or class of persons, in respect of any information or class of information that the Commission considers to be commercially sensitive, from any obligation to make that information available to the public as part of the requirements of information disclosure regulation or price-quality regulation.

(2)

The Commission may grant the exemption on any terms and conditions that it thinks fit.

(3)

The exemption must be granted by notice in the Gazette, and takes effect from the date specified in the exemption (which must not be earlier than the date of the Gazette notice).

(4)

The Commission may, in like manner, vary or revoke any exemption.

(5)

The Commission must keep a list of all current exemptions made by it under this section available for public inspection free of charge during normal office hours of the Commission at the offices of the Commission.

(6)

An exemption under this section is neither a legislative instrument nor a disallowable instrument for the purposes of the Legislation Act 2012 (and does not have to be presented to the House of Representatives under section 41 of that Act).

Compare: 1986 No 5 s 53ZG

219 Material may be incorporated by reference

Schedule 5 of the Commerce Act 1986 applies with any necessary modifications if the Commission wishes to incorporate material by reference in 1 or more of the following:

(a)

a section 170 determination:

(b)

an input methodology:

(c)

regulations made under this Part.

Compare: 1986 No 5 s 53ZF

Subpart 9—Appeals from Commission determinations

220 Appeals in relation to Commission determinations

(1)

A person may appeal to the High Court under this subsection against any determination of the Commission under this Part, other than the following:

(a)

a section 170 determination, or any part of a section 170 determination, that sets out how information disclosure regulation applies to a regulated fibre service provider:

(b)

an input methodology determination under subpart 3 (for which a separate appeal right is given under that subpart).

(2)

An appeal against a section 170 determination under subsection (1) may not include an appeal against all or part of an input methodology, whether on a point of law or any other ground.

(3)

A person may appeal to the High Court under this subsection on a question of law against any determination of the Commission under this Part (including a determination referred to in subsection (1)), except if the person has appealed, or is able to appeal, on the question of law against the determination under section 182.

(4)

An appeal under this section must be made by giving notice of appeal within 20 working days after the date of the determination appealed against or within such further time as the court may allow.

(5)

Sections 77 and 93 to 97 of the Commerce Act 1986 apply with any necessary modifications in respect of an appeal under this section.

(6)

To avoid doubt, a recommendation to the Minister by the Commission is not a determination for the purposes of this section.

Compare: 1986 No 5 s 91

Subpart 10—Orders and regulations

221 Order for reset date

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, declare a date to be the reset date for the purpose of sections 194 and 195.

(2)

The power to make an order made under this section may be exercised only once.

(3)

The Minister must not recommend that an order be made under this section unless the Commission has, after a review under section 207, recommended that the order be made.

222 Persons subject to regulation under Part 6

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations prescribing a person who provides fibre fixed line access services as being subject to 1 or both of the following:

(a)

information disclosure regulation:

(b)

price-quality regulation.

(2)

Regulations made under this section may include the name and a description of the person.

(3)

The Minister must not recommend that regulations be made under this section unless—

(a)

the Commission has consulted with interested parties; and

(b)

the Commission has recommended to the Minister that the person provides fibre fixed line access services in a market where the person can exercise a substantial degree of market power; and

(c)

the Commission has recommended to the Minister that making the provider subject to the proposed form of regulation meets the purpose in section 162.

(4)

In this section, a reference to a person who provides fibre fixed line access services includes a person who provides services that would be fibre fixed line access services if the person was already subject to information disclosure regulation or price-quality regulation under this Part.

223 Anchor services

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations prescribing a fibre fixed line access service to be an anchor service by prescribing in relation to the service—

(a)

the name and technical specification of the service; and

(b)

any conditions; and

(c)

the period during which a regulated fibre service provider who is subject to price-quality regulation must provide the service; and

(d)

the maximum price that a regulated fibre service provider who is subject to price-quality regulation may charge for providing the service.

(2)

Except as provided for in subsection (3)(b), the Minister must not recommend that regulations be made under this section unless the Commission has, after a review under section 206, recommended that the regulations be made.

(3)

The Minister must not recommend that regulations be made under subsection (1)(d) unless,—

(a)

if a review has been carried out under section 206, the Minister is satisfied that the regulations will prescribe a maximum price by reference to—

(i)

the contract price of the service immediately before the implementation date, with an annual CPI adjustment mechanism; or

(ii)

any other method recommended by the review; or

(b)

if a review has not been carried out under section 206, the Minister is satisfied that the regulations will prescribe a maximum price by reference to the contract price of the service immediately before the implementation date, with an annual CPI adjustment mechanism.

224 Direct fibre access services

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations prescribing a fibre fixed line access service to be a direct fibre access service by prescribing in relation to the service—

(a)

the name and technical specification of the service; and

(b)

any conditions; and

(c)

the period during which a regulated fibre service provider who is subject to price-quality regulation must provide the service; and

(d)

the maximum price that a regulated fibre service provider who is subject to price-quality regulation may charge for providing the service.

(2)

Except as provided for in subsection (3)(b), the Minister must not recommend that regulations be made under this section unless the Commission has, after a review under section 207, recommended that the regulations be made.

(3)

The Minister must not recommend that regulations be made under subsection (1)(d) unless,—

(a)

if a review has been carried out under section 207, the Minister is satisfied that the regulations will prescribe a maximum price by reference to—

(i)

the contract price of the service immediately before the implementation date, with an annual CPI adjustment mechanism; or

(ii)

any other method recommended by the review; or

(b)

if a review has not been carried out under section 207, the Minister is satisfied that the regulations will prescribe a maximum price by reference to the contract price of the service immediately before the implementation date, with an annual CPI adjustment mechanism.

225 Unbundled fibre services

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for 1 or more of the following purposes:

(a)

prescribing, in relation to an unbundled fibre service, 1 or both of the following:

(i)

the technical specification of the service:

(ii)

any conditions:

(b)

prescribing, in relation to an unbundled fibre service, the period during which a regulated fibre service provider who is subject to price-quality regulation must provide the service:

(c)

prescribing, in relation to an unbundled fibre service, the maximum price that a regulated fibre service provider who is subject to price-quality regulation may charge for providing the service.

(2)

The Minister must not recommend that regulations be made under this section unless the Commission has, after a review under section 207, recommended that the regulations be made.

(3)

The Minister must not recommend that regulations be made under subsection (1)(c) unless—

(a)

regulations have been made under subsection (1)(b); and

(b)

a review has been carried out under section 207; and

(c)

the Minister is satisfied that the regulations will prescribe a maximum price by reference to—

(i)

the contract price of the service immediately before the implementation date, with an annual CPI adjustment mechanism; or

(ii)

any other method recommended by the review.

226 Specified points of interconnection

(1)

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations prescribing points of interconnection for the purposes of establishing fibre handover points.

(2)

Regulations made under subsection (1) may prescribe a point of interconnection by reference to 1 or more of the following:

(a)

a regulated fibre service provider’s network:

(b)

a geographical location:

(c)

the UFB initiative.

(3)

The Minister must not recommend that regulations be made under this section unless the Commission has recommended that the regulations be made.

(4)

The Commission must not recommend an amendment to a specified point of interconnection unless the amendment—

(a)

is for an appropriate technical purpose; and

(b)

is consistent with the purpose in section 162.

(5)

The first regulations made under this section must prescribe points of interconnection based on the points of interconnection that apply as at the close of 31 December 2019 under the UFB initiative.

Part 3 Amendments related to consumer matters, consequential amendments, and other miscellaneous amendments

Subpart 1—Amendments related to consumer matters

Retail service quality monitoring

24 Section 9A amended (Functions of Commission in relation to sector monitoring and information dissemination)

(1)

In section 9A(1)(c), after “(a) and (b)”, insert “; and”.

(2)

After section 9A(1)(c), insert:

(d)

must monitor retail service quality in relation to telecommunications services; and

(e)

must make available reports, summaries, and information about retail service quality in a way that better informs consumer choice.

(3)

In section 9A(2), replace “subsection (1)(c)” with “subsections (1)(c) and (e) and (3).

(4)

After section 9A(2), insert:

(3)

For the purpose of carrying out its functions under subsection (1)(d) and (e), the Commission may, in addition to exercising any other of its powers under this Act, by notice in writing, require any provider of telecommunications services to—

(a)

prepare and produce forecasts, forward plans, historical information, or other information; and

(b)

apply any methodology or format specified by the Commission in the preparation of forecasts, forward plans, historical information, or other information.

Enforcement

25 Section 156A amended (Application of section 156B)

After section 156A(1)(n), insert:

(o)

fails, without reasonable excuse, to comply with a Commission RSQ code:

(p)

fails, without reasonable excuse, to comply with the copper withdrawal code.

26 Section 156B amended (Enforcement actions that Commission may take)

(1)

In section 156B(1), replace “either” with “1”.

(2)

In section 156B(1)(b), after “Crown”, insert “; or”.

(3)

After section 156B(1)(b), insert:

(c)

in relation a person who commits a breach referred to in section 156A(1)(o) or (p), accept an undertaking under section 156CA.

(4)

After section 156B(1), insert:

(1A)

The Commission may, in addition to or instead of taking action under subsection (1), take 1 or both of the following actions against a person who commits a breach referred to in section 156A(1)(o):

(a)

apply to the High Court for an order under section 156MA:

(b)

apply to the High Court for an order under section 156MB.

(1B)

The Commission may, in addition to or instead of taking action under subsection (1), take 1 or both of the following actions against a person who commits a breach referred to in section 156A(1)(p):

(a)

apply to the High Court for an order under section 156MC:

(b)

apply to the High Court for an order under section 156MD.

27 New section 156BA inserted (Enforcement actions that end-user may take)

After section 156B, insert:

156BA Enforcement actions that end-user may take

(1)

If section 156B applies to a person who commits a breach referred to in section 156A(1)(p), an end-user (as referred to in clause 1 of Schedule 2A) may take 1 or both of the following actions against the person:

(a)

apply to the High Court for an order under section 156MC:

(b)

apply to the High Court for an order under section 156MD.

(2)

An end-user may take the action referred to in subsection (1) whether or not the Commission has taken action against the person under section 156B in respect of the breach.

28 New sections 156CA and 156CB and cross-heading inserted

After section 156C, insert:

Enforceable undertakings in relation to Commission RSQ code or copper withdrawal code

156CA Commission may accept undertakings

(1)

The Commission may accept a written undertaking given by, or on behalf of, a person in connection with any matter relating to the enforcement of a Commission RSQ code or the copper withdrawal code.

(2)

The person may withdraw or vary the undertaking with the consent of the Commission.

Compare: 1986 No 121 s 46A

156CB Enforcement of undertakings

(1)

If the Commission considers that a person who has given an undertaking under section 156CA has, without reasonable excuse, breached a term of that undertaking, the Commission may apply to the High Court for an order under subsection (2).

(2)

The High Court may make any of the following orders if it is satisfied that the person has, without reasonable excuse, breached a term of the undertaking:

(a)

an order directing the person to comply with the term:

(b)

an order directing the person to pay to the Crown—

(i)

an amount not exceeding the amount of any financial benefit that the person has obtained directly or indirectly and that is reasonably attributable to the breach; or

(ii)

any pecuniary penalty that the court determines to be appropriate (up to the maximum amount specified in section 156L(3)(c)):

(c)

any order that the court thinks appropriate directing the person to compensate any other person who has suffered loss or damage as a result of the breach:

(d)

an order for any consequential relief that the court thinks appropriate.

(3)

Section 156L(4) to (7) applies with any necessary modifications in respect of proceedings under this section.

Compare: 1986 No 121 s 46B

29 New sections 156MA to 156MD and cross-headings inserted

After section 156M, insert:

Additional remedies in relation to breach of Commission RSQ code

156MA Order to disclose information or publish advertisement

(1)

The High Court may make 1 or both of the following orders if the High Court is satisfied, on the application of the Commission, that a person has committed a breach referred to in section 156A(1)(o):

(a)

an order requiring that person, or any other person involved in the breach, to disclose, at that person’s own expense, to the public, or to a particular person or to persons included in a particular class of persons, in such manner as is specified in the order, such information, or information of such a kind, as is so specified, being information that is in the possession of the person to whom the order is directed or to which that person has access:

(b)

an order requiring that person, or any other person involved in the breach, to publish, at that person’s own expense, in such manner and at such times as are specified in the order, corrective statements the terms of which are specified in, or are to be determined in accordance with, the order.

(2)

The High Court may hear and determine an application under subsection (1) in conjunction with any other proceedings under this Part.

Compare: 1986 No 121 s 42

156MB Other orders for breach of Commission RSQ code

(1)

The High Court may make 1 or more of the following orders if the High Court is satisfied, on the application of the Commission, that a person (person X) has committed a breach referred to in section 156A(1)(o):

(a)

an order directing person X to refund money or return property to any other person:

(b)

an order directing person X to pay to any other person the amount of any loss or damage caused to that other person by the conduct of person X:

(c)

an order directing person X, at person X’s own expense, to supply a service to any other person:

(d)

an order declaring all or part of a contract made between person X and any other person, or a collateral arrangement relating to such a contract,—

(i)

to be void; and

(ii)

if the court thinks fit, to have been void at all times on and after a date specified in the order, which may be before the date on which the order is made:

(e)

an order in respect of a contract made between person X and any other person, or a collateral arrangement relating to such a contract,—

(i)

varying the contract or the arrangement in the manner specified in the order; and

(ii)

if the court thinks fit, declaring the varied contract or arrangement to have had effect on and after a date specified in the order, which may be before the date on which the order is made.

(2)

The High Court may hear and determine an application under subsection (1) in conjunction with any other proceedings under this Part.

Compare: 1986 No 121 s 43

Additional remedies in relation to breach of copper withdrawal code

156MC Other orders for breach of copper withdrawal code

(1)

The High Court may make 1 or both of the following orders if the High Court is satisfied, on the application of the Commission or an end-user, that a person has committed a breach referred to in section 156A(1)(p):

(a)

an order directing the person to pay to an end-user the amount of any loss or damage caused to the end-user by the conduct of the person:

(b)

an order directing the person, at the person’s own expense, to supply a service to an end-user.

(2)

The High Court may hear and determine an application under subsection (1) in conjunction with any other proceedings under this Part.

Compare: 1986 No 121 s 43

156MD Injunctions for breach of copper withdrawal code

(1)

If the High Court is satisfied, on the application of the Commission or an end-user, that a person has committed a breach referred to in section 156A(1)(p), the court may grant an injunction restraining the person from engaging in conduct that constitutes or would constitute a breach of the copper withdrawal code.

(2)

The High Court may hear and determine an application under subsection (1) in conjunction with any other proceedings under this Part.

(3)

Sections 88 and 88A of the Commerce Act apply with any necessary modifications in relation to an injunction granted under this section.

Compare: 1986 No 5 s 81

Amendments to provisions inserted by Telecommunications Amendment Act (No 2) 2006

30 Section 156T replaced (Process to apply before Part may be commenced)

Replace section 156T with:

156T Process to apply before Part may be commenced

(1)

The Minister may recommend the making of an Order in Council under section 156S(1) only if the Minister is satisfied, at the time of making the recommendation, that any of the following applies:

(a)

no industry-based complaints resolution system has been established:

(b)

an industry-based complaints resolution system has been established, but in the Minister’s opinion it has failed to achieve the purpose of this Part set out in section 156U and the objectives of a consumer complaints system set out in section 156X:

(c)

the provisions being brought into force by the Order in Council are necessary to implement Government policy:

(d)

the Commission has reported to the Minister under section 240(5)(c) that, in relation to the industry dispute resolution scheme (as defined in Part 7),—

(i)

the scheme fails to achieve the purpose set out in section 241; or

(ii)

the scheme provider fails to achieve the purpose set out in section 242.

(2)

The Minister may not recommend the making of an Order in Council under subsection (1)(a) to (c) unless the Minister is satisfied that appropriate consultation has been carried out in accordance with section 156ZJ.

31 Section 156UA amended (Appointment of consumer complaints system)

Replace section 156UA(2) with:

(2)

To avoid doubt, this Part does not preclude—

(a)

the existence of 1 or more industry-based complaints resolution systems in addition to 1 or more systems appointed under this Part; and

(b)

the dispute resolution scheme provider for a Commission RSQ code being the person responsible for a consumer complaints system.

32 Section 156Y amended (Requirements for consumer complaints system)

After section 156Y(3), insert:

(4)

To avoid doubt, a consumer complaints system may resolve complaints by consumers against service providers in relation to a Commission RSQ code.

Retail service quality codes

33 New Part 7 inserted

After section 226 (as inserted by section 23 of this Act), insert:

Part 7 Consumer matters

Retail service quality codes

227 Purpose of retail service quality code

The purpose of a retail service quality code is to improve retail service quality for consumers of telecommunications services.

228 Interpretation

In this Part, unless the context otherwise requires,—

consumer means, in relation to a telecommunications service, the end-user of the service

industry dispute resolution scheme means the Telecommunications Dispute Resolution Scheme established by the Forum

scheme member means a member of the industry dispute resolution scheme

scheme provider means the person responsible for the industry dispute resolution scheme.

229 Commission may issue guidelines

The Commission may issue guidelines to the telecommunications industry on any matters relating to retail service quality codes, including advice on what matters are appropriately dealt with by retail service quality codes.

230 Commission review of industry retail service quality codes

(1)

The Commission may, at any time, review an industry retail service quality code.

(2)

After each review, the Commission must—

(a)

advise the Forum, the dispute resolution provider for the code (if any), and the Minister of any recommendations for improving the code and of any recommendations for creating a new code; and

(b)

advise the Minister of whether any previous recommendations have been implemented; and

(c)

advise the Minister of whether, in the Commission’s opinion,—

(i)

the code fails to achieve the purpose set out in section 227; or

(ii)

a Commission RSQ code would better achieve the purpose set out in section 227.

231 Commission retail service quality code

(1)

The Commission may make a retail service quality code in relation to the provision of 1 or more types of telecommunications service only if—

(a)

no industry retail service quality code has been made in relation to the service; or

(b)

an industry retail service quality code has been made in relation to the service, but in the Commission’s opinion—

(i)

the code fails to achieve the purpose set out in section 227; or

(ii)

a Commission RSQ code would better achieve the purpose set out in section 227.

(2)

If the Commission intends to make a Commission RSQ code, the Commission must, before making the code, provide a report to the Minister containing the reasons for making the code and the provision of this section that applies.

232 Contents of Commission retail service quality code

(1)

A Commission RSQ code must—

(a)

specify which telecommunications services it applies to; and

(b)

specify which telecommunications service providers it applies to; and

(c)

promote the purpose set out in section 227; and

(d)

specify the dispute resolution scheme that applies in relation to the code.

(2)

A Commission retail service quality code may—

(a)

impose binding obligations on telecommunications service providers that provide retail telecommunications services covered by the code; and

(b)

contain any other provisions that are necessary or desirable.

233 Process for making or amending Commission retail service quality code

(1)

In order to make a Commission RSQ code, the Commission must—

(a)

notify the process that will be followed to make the code; and

(b)

consult with interested persons; and

(c)

give public notice of a draft code.

(2)

A person is entitled to make submissions to the Commission not later than 30 working days after the date on which public notice of the draft code is given.

(3)

The Commission may make the code only if the Commission is satisfied that the draft code meets all the requirements set out in this Part.

(4)

The Commission may amend or revoke a code if the Commission considers that the code no longer meets all the requirements set out in this Part.

(5)

The same procedure that applies to making a code in subsections (1) to (3) must be followed to make an amendment or a revocation, with any necessary modifications.

(6)

The Commission must give public notice of every code that is made and every amendment or revocation of those codes.

234 Dispute resolution scheme

(1)

The dispute resolution scheme for all Commission RSQ codes made by the Commission under this Part is—

(a)

the industry dispute resolution scheme; or

(b)

if Part 4B comes into force in accordance with section 156S, a consumer complaints system—

(i)

that is appointed under that Part; and

(ii)

that the Minister declares under this section to be the dispute resolution scheme for Commission RSQ codes.

(2)

The scheme provider for the industry dispute resolution scheme must, on request by the Minister or the Commission, provide information on matters relating to any information or reports relevant to the administration of a Commission RSQ code.

(3)

Sections 235 to 239 apply only if the dispute resolution scheme for Commission RSQ codes is the industry dispute resolution scheme.

235 Disputes may be referred to dispute resolution scheme

(1)

A dispute between a consumer and a telecommunications service provider about their rights and obligations under a Commission RSQ code may be referred to the industry dispute resolution scheme by any of the parties to the dispute.

(2)

Disputes that may, depending on the relevant Commission RSQ code, be referred to the industry dispute resolution scheme include disputes about the following:

(a)

installation times:

(b)

how consumer complaints are handled:

(c)

other matters provided for in the code or by the industry dispute resolution scheme.

Compare: 2001 No 103 s 155ZI

236 Determinations binding on scheme members and certain other parties

(1)

This section applies if a dispute is referred to the industry dispute resolution scheme and a determination is made on the dispute under the rules of the scheme.

(2)

The determination is binding on each party to the dispute who is a member of the industry dispute resolution scheme (except to the extent that it may be modified by the District Court under section 239(3)), and the scheme member has no right of appeal against the determination.

(3)

The determination is binding on each party to the dispute who is not a member of the industry dispute resolution scheme, except if one of those parties lodges an appeal against the determination under section 237 and the court modifies or reverses the determination.

Compare: 2001 No 103 s 155ZJ

237 Appeals against determinations

(1)

A consumer or any other party to the dispute who is not a member of the scheme may, within the time allowed under section 238(1), appeal to the District Court against a determination.

(2)

The court may confirm, modify, or reverse the decision appealed against.

(3)

The decision of the court on the appeal is binding on all persons named as parties in the determination, and there is no right of appeal against the court’s decision.

Compare: 2001 No 103 s 155ZK

238 Procedure on appeal

(1)

An appeal under section 237 must be brought and determined in accordance with the rules of court, except that—

(a)

an appeal must be brought within 5 working days after the determination appealed against is notified to the party wanting to lodge the appeal, or any further time the court allows on an application made before or after that period ends; and

(b)

the industry dispute resolution scheme, as the maker of the determination appealed against, is not entitled to be represented at the hearing of the appeal; and

(c)

the court on appeal may not refer the determination back to the industry dispute resolution scheme for any purpose.

(2)

The court may hear all evidence provided and representations made by or on behalf of any party to the appeal that the court considers relevant to the appeal, whether or not the evidence would otherwise be admissible in a court.

Compare: 2001 No 103 s 155ZL

239 Compliance with rules, binding settlements, and determinations

(1)

Members of the industry dispute resolution scheme and each party to a dispute that is referred to the scheme must comply with the rules of the scheme.

(2)

On an application of the scheme provider for the industry dispute resolution scheme, the District Court may require a scheme member or other person who is a party to a dispute to do any of the following:

(a)

comply with the rules of the scheme:

(b)

comply with the terms of a binding settlement or determination made under the rules of the scheme.

(3)

If the District Court is satisfied that the terms of a binding settlement or determination are manifestly unreasonable, the court’s order under subsection (2)(b) may modify the terms of the binding settlement or determination, but only to the extent that the modification results in a binding settlement or determination that could have been made under the industry dispute resolution scheme.

(4)

If an order requiring a scheme member to comply with a binding settlement includes a requirement that the member pay an amount of money to a person, that order (or part of the order) may be enforced as if it were a judgment by the District Court for the payment of a sum of money.

(5)

A reference in this section to a scheme member includes a reference to a person who was a member of the dispute resolution scheme at the relevant time but is no longer a member at the time of the application or order.

Compare: 2001 No 103 s 155ZM

Commission review of industry dispute resolution schemes

240 Commission review of industry dispute resolution schemes

(1)

The Commission must, at least once every 3 years, review any dispute resolution scheme that—

(a)

has been set up by the telecommunications industry; and

(b)

deals with consumer complaints.

(2)

As part of a review of a scheme, the Commission may, without limitation, consider the following:

(a)

the purpose of the scheme:

(b)

the dispute resolution provider for the scheme:

(c)

the effectiveness of the scheme in resolving complaints by consumers against service providers:

(d)

the adequacy of the scheme rules:

(e)

whether the scheme rules comply with the following principles:

(i)

accessibility:

(ii)

independence:

(iii)

fairness:

(iv)

accountability:

(v)

efficiency:

(vi)

effectiveness:

(f)

whether any recommendations for improving the scheme made under subsection (4) have been implemented:

(g)

the purpose of the dispute resolution provider for the scheme:

(h)

the procedures that are used for receiving, investigating, and resolving complaints:

(i)

how promptly complaints are dealt with.

(3)

The Commission may require the following persons to provide the Commission with any information relevant to the matters included in subsection (2):

(a)

the dispute resolution provider for the scheme:

(b)

a service provider who is subject to the scheme.

(4)

After each review, the Commission must provide a report to the dispute resolution provider for the scheme on any recommendations for improving the scheme and when the recommendations should be implemented.

(5)

If the Commission considers that any recommendations made under subsection (4) have not been implemented satisfactorily, the Commission must provide a report to the Minister on—

(a)

the recommendations for improving the scheme made under subsection (4); and

(b)

whether those recommendations have been implemented; and

(c)

whether, in the Commission’s opinion,—

(i)

the scheme fails to achieve the purpose set out in section 241; or

(ii)

the dispute resolution provider for the scheme fails to achieve the purpose set out in section 242.

(6)

If the Commission proposes to report, under subsection (5)(c), that a scheme fails to achieve the purpose set out in section 241 or that the dispute resolution provider for the scheme fails to achieve the purpose in section 242, the Commission must give the following persons 20 working days to make submissions on a draft report:

(a)

the dispute resolution provider for the scheme:

(b)

a service provider who is subject to the scheme.

241 Purpose of dispute resolution scheme

The purpose of a dispute resolution scheme is to ensure that, if a consumer has a dispute with a service provider in relation to a retail service quality code, the consumer has access to a dispute resolution scheme for resolving that dispute in a timely manner.

242 Purpose of dispute resolution provider

The purpose of a dispute resolution provider, in relation to a dispute resolution scheme for a retail service quality code, is—

(a)

to operate the scheme; and

(b)

to administer the relevant code; and

(c)

to manage consumer complaints relating to the code; and

(d)

to investigate disputes relating to the code; and

(e)

to promote awareness of the scheme and the code; and

(f)

to monitor compliance with the scheme and the code; and

(g)

to enforce the provisions of the scheme and the code.

243 Interrelationship of remedies

(1)

Nothing in this Part limits or affects any right, duty, liability, or remedy that exists or is available apart from this Part.

(2)

Any right of action or other remedy available under, or in connection with, this Part may be taken, proceeded with, or heard in conjunction with any other action or remedy available under this Act or otherwise.

(3)

However, in determining whether to order a person to pay a penalty, compensation, or damages, the court must have regard to—

(a)

whether that person has already been ordered to pay a penalty, compensation, or damages for the same matter; and

(b)

if so, the amount and effect of that first order.

Compare: 2001 No 103 s 156AS

Subpart 2—Consequential and other miscellaneous amendments

34 Amendments to replace references to Telecom

(1)

In the provisions specified in Part 1 of Schedule 4, replace “Telecom” with “Spark” in each place.

(2)

In the provisions specified in Part 2 of Schedule 4, replace “Telecom’s” with “Spark’s” in each place.

35 Repeals

Repeal the provisions specified in Schedule 5.

36 Consequential amendments

(1)

In section 5, definition of party, paragraph (a), delete “or a residual terms determination made under section 30ZB”.

(2)

In the heading to section 69T, replace sections 69O and 69S with section 69O.

(3)

In section 69T, replace “sections 69O and 69S” with “section 69O”.

(4)

In section 69V, replace “sections 69O or 69S” with “section 69O”.

(5)

In section 107(1)(c), delete “or section 113”.

(6)

In section 156A(1)(g), delete “69ZC(4), 69ZF(2), or”.

37 Miscellaneous amendments

(1)

In section 5, definition of chief executive, delete “of Economic Development”.

(2)

In section 69C, definition of sharing arrangement, paragraph (a), replace “between Telecom and Chorus” with “between Spark and Chorus”.

(3)

In section 156AZB, definition of Telecom, replace “Chorus and a successor to Telecom or Chorus” with “Chorus, Spark, and a successor to Chorus or Spark”.

Schedule 1 New Part 2 inserted into Schedule 1AA

s 10

Part 2 Provisions relating to Telecommunications (New Regulatory Framework) Amendment Act 2017

7 Implementation date

(1)

The Minister may, at any time before the implementation date, defer the implementation date by up to 2 years if the Commission makes a written request for a deferral.

(2)

The Minister must notify a deferral, and specify the new implementation date, in the Gazette.

(3)

If a request for a deferral is granted, during the period starting on 1 January 2020 and ending on the close of the day immediately before the implementation date, the terms of each specified contract (including in relation to maximum prices) that are in force immediately before 1 December 2019 continue in full force and effect, except that a UFB partner may apply an annual CPI adjustment to a maximum price on 1 January in each year.

(4)

If more than 1 deferral is granted under subclause (1), the total period of those deferrals must not exceed 2 years.

(5)

In this clause,—

maximum price means the maximum price a UFB partner is able, under the terms of a specified contract, to charge for providing a service

specified contract means a contract between Crown Fibre Holdings Limited and a UFB partner that was entered into as part of the UFB initiative

UFB initiative has the meaning set out in section 156AB

UFB partner has the meaning set out in section 156AB.

8 Information disclosure under subpart 3 of Part 4AA

(1)

An LFC is not required to comply with any information disclosure requirements under subpart 3 of Part 4AA in respect of any period during which the LFC is also subject to information disclosure regulation under Part 6.

(2)

However, an LFC must continue to prepare and disclose information in accordance with section 156AU in respect of any disclosure period for the LFC that starts before the implementation date but ends on or after the implementation date.

(3)

In this clause,—

disclosure period means the period of time, set by the Commission under section 156AU, in respect of which the LFC is required to disclose information under subpart 3 of Part 4AA

LFC has the meaning set out in section 156AB.

9 Anchor services review before first regulatory period

(1)

Despite section 206(2)(c), if the Commission starts a review under section 206 before the start of the first regulatory period, the review must not consider the prescribed period for an anchor service.

(2)

If the Commission starts a review under section 206 before the start of the first regulatory period, the Commission must not recommend amending the prescribed maximum price for an anchor service unless the Commission also recommends amending the specification of the service.

10 Procedural requirements for initial regulations made under section 222 (persons subject to regulation under Part 6)

Section 222(3) does not apply in relation to any regulations made under section 222(1) before the start of the first regulatory period.

11 Procedural requirements for initial regulations made under section 223 (anchor services)

Section 223(2) does not apply in relation to the first regulations made under section 223(1).

12 Procedural requirements for initial regulations made under section 224 (direct fibre access services)

Section 224(2) does not apply in relation to the first regulations made under section 224(1).

13 Procedural requirements for initial regulations made under section 225 (unbundled fibre services)

Section 225(2) does not apply in relation to the first regulations made under section 225(1).

Schedule 2 Amendments to Schedule 1

s 11

Part 2, subpart 1, under the heading Retail services offered by means of a fixed telecommunications network

Repeal the item relating to Description of service applicable before the expiry of 3 years from separation day.

In the item relating to Description of service applicable after the expiry of 3 years from separation day, in the first column, delete applicable after the expiry of 3 years from separation day.

Part 2, subpart 1, under the heading Local access and calling service offered by means of fixed telecommunications network

Repeal each of the following items:

(a)

item relating to Description of service applicable before the expiry of 3 years from separation day:

(b)

item relating to Conditions applicable before the expiry of 3 years from separation day:

(c)

item relating to Initial pricing principle applicable before the expiry of 3 years from separation day:

(d)

item relating to Final pricing principle applicable before the expiry of 3 years from separation day.

In the item relating to Description of service applicable after the expiry of 3 years from separation day, in the first column, delete applicable after the expiry of 3 years from separation day.

In the item relating to Conditions applicable after the expiry of 3 years from separation day, in the first column, delete applicable after the expiry of 3 years from separation day.

In the item relating to Initial pricing principle applicable after the expiry of 3 years from separation day, in the first column, replace after the expiry of 3 years from separation day with before 16 December 2019.

After the item relating to Initial pricing principle applicable after the expiry of 3 years from separation day, insert:

Initial pricing principle applicable on and after 16 December 2019

For a price-capped residential local access and calling service, either—

(a)

Spark’s standard price for its price-capped residential local access and calling service offered to end-users by means of a fixed telecommunications network in the relevant market, minus 2%; or

(b)

if a person is also purchasing Chorus’s unbundled bitstream access service in relation to the relevant subscriber line, the price in paragraph (a) minus $31.68, with an annual CPI adjustment applied on 16 December in each year

For a non-price-capped local access and calling service, either—

(a)

retail price less a discount benchmarked against discounts in comparable countries that apply retail price minus avoided costs saved pricing in respect of these services, in the case of a service offered by Spark in markets in which Spark faces limited, or is likely to face lessened, competition for that service; or

(b)

retail price less a discount benchmarked against discounts in comparable countries that apply retail price minus actual costs saved pricing in respect of these services, in the case of a service offered by Spark in markets in which Spark does not face limited, or lessened, competition for that service; or

(c)

if a person is also purchasing Chorus’s unbundled bitstream access service in relation to the relevant subscriber line, the price in paragraph (a) minus $31.68, with an annual CPI adjustment applied on 16 December in each year; or

(d)

if a person is also purchasing Chorus’s unbundled bitstream access service in relation to the relevant subscriber line, the price in paragraph (b) minus $31.68, with an annual CPI adjustment applied on 16 December in each year

In the item relating to Final pricing principle applicable after the expiry of 3 years from separation day, in the first column, replace after the expiry of 3 years from separation day with before 16 December 2019.

After the item relating to Final pricing principle applicable after the expiry of 3 years from separation day, insert:

Final pricing principle applicable on and after 16 December 2019

For a price-capped residential local access and calling service, either—

(a)

Spark’s standard price for its price-capped residential local access and calling service offered to end-users by means of a fixed telecommunications network in the relevant market, minus actual costs saved; or

(b)

if a person is also purchasing Chorus’s unbundled bitstream access service in relation to the relevant subscriber line, the price in paragraph (a) minus $31.68, with an annual CPI adjustment applied on 16 December in each year

For a non-price-capped local access and calling service, either—

(a)

average or best retail price minus a discount comprising avoided costs saved pricing, in the case of a service offered by Spark in markets in which Spark faces limited, or is likely to face lessened, competition for that service; or

(b)

average or best retail price minus a discount comprising actual costs saved, in the case of a service offered by Spark in markets in which Spark does not face limited, or is not likely to face lessened, competition for that service; or

(c)

if a person is also purchasing Chorus’s unbundled bitstream access service in relation to the relevant subscriber line, the price in paragraph (a) minus $31.68, with an annual CPI adjustment applied on 16 December in each year; or

(d)

if a person is also purchasing Chorus’s unbundled bitstream access service in relation to the relevant subscriber line, the price in paragraph (b) minus $31.68, with an annual CPI adjustment applied on 16 December in each year

Part 2, subpart 1, under the heading Chorus’s unbundled bitstream access

In the item relating to Conditions, replace “That either— ” with “The end-user’s building (or, where relevant, the building’s distribution frame) is not located in a specified fibre area, and either— ”.

Repeal each of the following items:

(a)

item relating to Initial pricing principle applicable before the expiry of 3 years from separation day:

(b)

item relating to Final pricing principle applicable before the expiry of 3 years from separation day.

In the item relating to Initial pricing principle applicable after the expiry of 3 years from separation day, in the first column, replace after the expiry of 3 years from separation day with before 16 December 2019.

In the item relating to Final pricing principle applicable after the expiry of 3 years from separation day, in the first column, replace after the expiry of 3 years from separation day with before 16 December 2019.

After the item relating to Final pricing principle applicable after the expiry of 3 years from separation day, insert:

Initial pricing principle applicable on and after 16 December 2019

The year 5 prices specified in Schedule 2 of the Commission’s standard terms determination for Chorus’s unbundled bitstream access service, with an annual CPI adjustment applied on 16 December in each year

Final pricing principle applicable on and after 16 December 2019

The year 5 prices specified in Schedule 2 of the Commission’s standard terms determination for Chorus’s unbundled bitstream access service, with an annual CPI adjustment applied on 16 December in each year

Part 2, subpart 1, under the heading Chorus’s unbundled bitstream access backhaul

In the item relating to Initial pricing principle, in the first column, after principle, insert applicable before 1 January 2020.

In the item relating to Final pricing principle, in the first column, after principle, insert applicable before 1 January 2020.

After the item relating to Final pricing principle, insert:

Initial pricing principle applicable on and after 1 January 2020

The prices that applied as at 1 January 2020 under Schedule 2 of the Commission’s standard terms determination for Chorus’s unbundled bitstream access backhaul service, with an annual CPI adjustment applied on 1 January in each year

Final pricing principle applicable on and after 1 January 2020

The prices that applied as at 1 January 2020 under Schedule 2 of the Commission’s standard terms determination for Chorus’s unbundled bitstream access backhaul service, with an annual CPI adjustment applied on 1 January in each year

Part 2, subpart 1, under the heading Chorus’s unbundled copper local loop network

Repeal the heading and each item related to the heading.

Part 2, subpart 1, under the heading Chorus’s unbundled copper local loop network co-location

In the item relating to Initial pricing principle, in the first column, after principle, insert applicable before 1 January 2020.

In the item relating to Final pricing principle, in the first column, after principle, insert applicable before 1 January 2020.

After the item relating to Final pricing principle, insert:

Initial pricing principle applicable on and after 1 January 2020

The prices that applied as at 1 January 2020 under Schedule 2 of the Commission’s standard terms determination for Chorus’s unbundled copper local loop network co-location service, with an annual CPI adjustment applied on 1 January in each year

Final pricing principle applicable on and after 1 January 2020

The prices that applied as at 1 January 2020 under Schedule 2 of the Commission’s standard terms determination for Chorus’s unbundled copper local loop network co-location service, with an annual CPI adjustment applied on 1 January in each year

Part 2, subpart 1, under the heading Chorus’s unbundled copper local loop network backhaul (distribution cabinet to telephone exchange)

Repeal the heading and each item related to the heading.

Part 2, subpart 1, under the heading Chorus’s unbundled copper local loop network backhaul (telephone exchange to interconnect point)

In the item relating to Initial pricing principle, in the first column, after principle, insert applicable before 1 January 2020.

In the item relating to Final pricing principle, in the first column, after principle, insert applicable before 1 January 2020.

After the item relating to Final pricing principle, insert:

Initial pricing principle applicable on and after 1 January 2020

The prices that applied as at 1 January 2020 under Schedule 2 of the Commission’s standard terms determination for Chorus’s unbundled copper local loop network backhaul (telephone exchange to interconnect point) service, with an annual CPI adjustment applied on 1 January in each year

Final pricing principle applicable on and after 1 January 2020

The prices that applied as at 1 January 2020 under Schedule 2 of the Commission’s standard terms determination for Chorus’s unbundled copper local loop network backhaul (telephone exchange to interconnect point) service, with an annual CPI adjustment applied on 1 January in each year

Part 2, subpart 1, under the heading Chorus’s unbundled copper low frequency service

Replace the item relating to Conditions with:

Conditions:

Chorus’s unbundled copper low frequency service is only available where—

(a)

Chorus’s local loop that connects the end-user’s building (or, where relevant, the building’s distribution frame) to the handover point in Chorus’s local telephone exchange remains in place; and

(b)

the end-user’s building (or, where relevant, the building’s distribution frame) is not located in a specified fibre area

To avoid doubt, there is no obligation on Chorus that Chorus’s copper network that connects a cabinet (or equivalent facility) and Chorus’s local telephone exchange remain in place or be maintained if that part of Chorus’s copper network is only being used to provide Chorus’s unbundled copper low frequency services

In the item relating to Initial pricing principle, in the first column, after principle, insert applicable before 16 December 2019.

In the item relating to Final pricing principle, in the first column, after principle, insert applicable before 16 December 2019.

After the item relating to Final pricing principle, insert:

Initial pricing principle applicable on and after 16 December 2019

The year 5 prices specified in Schedule 2 of the Commission’s standard terms determination for Chorus’s unbundled copper low frequency service, with an annual CPI adjustment applied on 16 December in each year

Final pricing principle applicable on and after 16 December 2019

The year 5 prices specified in Schedule 2 of the Commission’s standard terms determination for Chorus’s unbundled copper low frequency service, with an annual CPI adjustment applied on 16 December in each year

Schedule 3 New Schedule 2A inserted

s 12

Schedule 2A Copper withdrawal code

s 69AF

1 Copper withdrawal code

(1)

The Commission, or the Forum if requested to do so by the Commission, must prepare a code to be known as the copper withdrawal code, setting out minimum consumer protection requirements for end-users of the following:

(a)

copper fixed line access services in areas that become specified fibre areas:

(b)

Chorus’s unbundled copper local loop network:

(c)

Chorus’s unbundled copper local loop network backhaul (distribution cabinet to telephone exchange).

(2)

The code must be prepared before the implementation date.

(3)

The minimum requirements that the code must include are that, before Chorus is permitted to stop supplying a service under section 69AC or 69AD,—

(a)

the end-user in relation to the service must be able to—

(i)

access a fibre fixed line access network; and

(ii)

have a fibre connection installed—

(A)

within a reasonable time frame; and

(B)

whether the connection is standard or non-standard, at no cost to the end-user; and

(b)

Chorus must give the end-user, the access seeker, and the relevant regulated fibre service provider reasonable notice of the proposed withdrawal of the service; and

(c)

the functionality provided by the services that are to be withdrawn must, apart from legacy services, be available to the end-user over a fibre fixed line access network; and

(d)

Chorus must provide the end-user with information about—

(i)

the withdrawal of the services; and

(ii)

the need to make alternative arrangements, such as battery backup, to maintain service on fixed line access services in the event of a power failure; and

(e)

Chorus must, if it is reasonably practicable to do so, provide the end-user with information about the fibre fixed line access services available to the end-user; and

(f)

the anchor services or commercial equivalents must be available at the end-user’s premises on a fibre fixed line access network; and

(g)

any other prescribed matters must be complied with.

(4)

The code may contain any other provisions that are necessary or desirable.

(5)

In this clause,—

anchor service has the meaning set out in section 164

fibre connection means a fibre-based network for telecommunications that incorporates fibre optic cable

legacy service means the services (if any) specified in the copper withdrawal code as legacy services

standard connection and non-standard connection have the meanings set out in section 155ZU.

2 Consultation process on code

(1)

The Commission or the Forum (as appropriate) must—

(a)

notify the process that will be followed to make the code; and

(b)

consult with interested persons; and

(c)

give public notice of a draft code.

(2)

A person is entitled to make submissions to the Commission or the Forum (as appropriate) not later than 30 working days after the date on which public notice of the draft code is given.

3 Commission’s discretion to approve draft code

The Commission may approve a draft code if the Commission is satisfied that the draft code meets all the requirements set out in this Act.

4 Amendment of approved code initiated by Commission

(1)

The Commission may prepare an amendment to the approved code or revoke the approved code if the Commission considers that the approved code no longer meets all the requirements set out in this Act.

(2)

The same procedure that applies to making a code in clauses 2 and 3 must be followed to make an amendment or a revocation.

5 Public notice of approved code

The Commission must give public notice of—

(a)

the approved code; and

(b)

every amendment or revocation of the approved code.

Schedule 4 Replacing references to “Telecom” or “Telecom’s”

s 34

Part 1 Replacing references to “Telecom” with “Spark”

Section 69C, definition of sharing arrangement, paragraph (c)(vii)

Section 69E(1) and (2)

Section 69F(1)

Section 69G

Section 69H(1) and (2)

Section 69I(1)

Section 69K(2)

Section 69M(1) and (2)

Section 69N(7)

Section 69U(3)

Section 69XK(2)

Section 105(1) and (1A)

Section 111A(2)

Parts 2 and 3 of Schedule 1

Part 2 Replacing references to “Telecom’s” with “Spark’s”

Part 2 of Schedule 1

Schedule 5 Repeals

s 35

Section 4(eb)

Section 22(2)

Section 30A(2)(e)

Section 30O(3)

Section 30R(3)(b)

Section 30S(3) and (4)

Sections 30U to 30ZD and the cross-heading above section 30U

Section 69R

Section 69S

Part 2B

Section 101A

Section 113

Subpart 3 of Part 4AA

Subpart 5 of Part 4AA

Section 156A(1)(h)

Section 156M(1)(b)

Section 156N, definition of enforceable matter, paragraph (c)

Section 157AA

Section 158 and Schedule 4

Section 159

Section 161