The Commerce Commission has released draft guidance designed to promote competition and innovation related to unbundled fibre services.
The draft guidance is to help the telecommunications industry understand its approach to monitoring and enforcing obligations on Chorus and other local fibre companies (LFCs) to allow retailers access to unbundled fibre services with acceptable terms and prices.
What is unbundling? "Unbundling means that instead of buying access to the LFC’s full network, retailers can buy access to just the LFC’s fibre optic cables. The retailer can then install their own electronic equipment to deliver new broadband products and services, such as broadband plans for heavy data users who stream 4K television," Telecommunications Commissioner Dr Stephen Gale said.
Undertakings with the Crown have obliged LFCs to offer an unbundled fibre service to retailers such as 2degrees, Vodafone, Vocus, Vector, Trustpower and Spark since 1 January 2020 on an equivalent and non-discriminatory basis, using networks developed as part of the Government’s Ultrafast Broadband initiative.
However, there has been some concern from retailers about whether the unbundled terms and prices offered are the equivalent of what the LFCs effectively supply to themselves when they provide standard broadband services.
"Unbundling is important as it is designed to promote competition and innovation in fibre broadband services," Dr Gale said.
"This draft guidance is designed to help the telecommunications industry understand how we interpret the non-discrimination and equivalence obligations on the LFCs when exercising our monitoring and enforcement powers under the Telecommunications Act."
Consultation is open on the draft guidance until 28 April 2020, with cross-submissions due by 12 May 2020. The Commission intends to publish its final guidance later this year.
Unbundling is when retail Internet Service Providers (ISPs) like Vodafone, 2Degrees, Spark or Vocus, put their own network technology on Chorus’ network so that they can manage their whole service to the customer. This gives the ISP more control over what services they offer and how much they charge for them.
However, there has previously been conflict as telecommunications companies negotiate with Chorus the proposed pricing for unbundled fibre broadband.
The move should be good news for fibre broadband customers, as it will ensure acceptable pricing for access to unbundled fibre, resulting in more choice and competition when it comes fibre broadband plans available to customers.