Communications markets regulatory system

This page describes the communications markets regulatory system, its objectives and our qualitative assessment of it. It also lists the main statutes and changes to regulation either proposed or in progress.

System description and objectives

The communication markets regulatory system spans fixed line, wireless and postal communications networks and includes the allocation of spectrum resources for wireless technologies. The system regulates the natural monopoly features inherent in aspects of communications networks for the long term interests of consumers. It provides:

  • the regulatory framework for communications providers to access communications networks
  • for the Commerce Commission to designate or specify particular services, to support such access
  • a new framework for regulating fibre services – the Telecommunications (New Regulatory Framework) Amendment Act 2018 refers
  • particular consumer protections for telecommunications end-users, including:
    • retail service quality codes
    • an emergency contact code
    • a copper withdrawal code
    • measures to enable the Commerce Commission to administer and enforce compliance with these codes, and
    • protections against spam.

The communications markets system also incorporates regulatory powers and operational functions that support our national security system:

  • it regulates the provision of telecommunications network information for national security purposes, and
  • CERT NZ monitors cyber security threats, responds to cyber security incidents and coordinates government agencies’ responses to reported incidents.

Objectives

The objective of the communications markets regulatory system is to provide for the effective operation of communications markets by:

  • promoting competition,
  • protecting consumers, and
  • allocating resource efficiently.

Ministerial portfolio and key statutes

Portfolio Key statutes

Broadcasting, Communications and Digital Media(external link)

  • Telecommunications Act 2001
  • Radiocommunications Act 1989
  • Telecommunications (Interception Capability and Security) Act 2013
  • Unsolicited Electronic Messages Act 2007

Regulatory agencies and their roles

Policy advice

Agency Role

MBIE (Lead)

Responsible for the strategy and policy advice functions in relation to communications markets and spectrum management.

Treasury

Provides secondary advice in relation to the communications markets regulatory system. Also responsible for overseeing the Crown’s trading enterprises eg NZ Post, Crown Infrastructure Partners.

Commerce Commission

Provides advice and information on the operational implications of telecommunications policy proposals.

Operational policy and regulatory determinations

Agency Role

Commerce Commission (Lead)

Responsible for operational strategy, policy, processes and determinations to implement telecommunications law. This includes developing rules and processes for regulated entities, making determinations on applications, and general enforcement and regulatory control policies and priorities.

MBIE

Responsible for some operational policy matters including administration of telecommunication levies (the Telecommunications Development Levy and Telecommunication Regulatory Levy); the administration of radio spectrum rights and licences; and the monitoring and amendment of particular non-price parameters of postal services.

Service delivery

Agency Role

CERT NZ

Collates a profile of the cyber security threat landscape in New Zealand. Responds to cyber security incidents and coordinates government agencies’ responses to reported cyber security incidents.

Advice, education and information

Agency Role

Commerce Commission (Lead for telecommunications)

Responsible for providing a range of advice, information, advocacy and education to the public on the Telecommunications Act, and to the Minister as part of particular studies, such as the mobile market study, and as part of their consumer education and reporting.

MBIE (Lead for spectrum management)

Responsible for providing a range of advice, information, advocacy and education to the public on spectrum management.

CERT NZ (Lead for cyber security)

Provides information and advice to help New Zealand stay resilient to cyber security threats.

Compliance and enforcement

Agency Role

Commerce Commission (Lead for telecommunications)

Responsible for enforcement of the Telecommunications Act, and the competition issues associated with spectrum holdings.

MBIE (Lead for spectrum management)

Responsible for enforcement of the Radiocommunications Act

Others

The courts – may adjudicate on Telecommunications Act interventions and enforcement cases; provide judicial oversight of Commerce Commission processes and determinations.

The Telecommunications Industry Forum – establishes and implements industry-led customer codes. More information in Main stakeholders section below.

Monitoring and evaluation

Agency Role

MBIE (Lead)

Monitors and evaluates performance of the communications regulatory system through environmental scanning, ongoing stakeholder engagement, and initiating particular policy relevant research.

Commerce Commission

Monitors and evaluates communications market developments, and the particular need for determinations.

Collaboration and information-sharing between regulatory agencies

MBIE maintains a close relationship with the Commerce Commission, the Telecommunications Commissioner and the industry-led code development body - the Telecommunications Industry Forum - and meets with relevant representatives to share information and monitor the progress of work programmes.

CERT NZ, which is also part of MBIE, works with other organisations in the cyber security environment across the private, public and not-for-profit sectors in New Zealand. Key regulatory partners are the Department of Internal Affairs, the National Cyber Security Centre, and the New Zealand Police.

Regulated parties and main stakeholders

Regulated parties include:

  • Telecommunications providers – both wholesale network providers and retailers
  • Internet service providers and those issuing unsolicited electronic messages (spam)
  • Users of radio spectrum
  • Suppliers of electrical, electronic or radio products
  • Postal operators, as specified under the Postal Services Act 1988.

Main stakeholders

The Telecommunications Industry Forum (TCF) – an industry body representing telecommunications providers. It establishes and implements industry-led codes, covering matters such as:

  • Customer experience and protection codes, including: broadband product disclosure; customer complaints; customer installations; and customer transfer.
  • Codes of practice between providers to facilitate infrastructure-sharing and interconnections between network operators and service providers.
  • Mobile phone services, including: international roaming; messaging services; and, phone recycling.
  • Access to public services, such as emergency services.

New Zealand Radio Sector Group – provides a national forum for exploring and debating international proposals for spectrum usage (or changes to usage) and related spectrum management issues, as initiated through the International Telecommunications Union Radiocommunications Sector.

Radio Broadcasters Association – represents the interests of the commercial radio industry to its many partners and stakeholders within the government, business, music industry and local communities of New Zealand.

Netsafe – a key referral partner for CERT NZ, Netsafe is a not-for-profit organisation that provides online safety help, support, expertise and education to people in New Zealand.

The telecommunications dispute resolution entities:

  • Telecommunications Dispute Resolution (TDR) provides the means for telecommunication consumers to seek independent redress for complaints they may have with their service providers that have not been resolved directly.
  • Utilities Disputes provides mechanisms to resolve disputes about legal access to property for the installation of fibre-to-the-premises services.

Other key stakeholders include consumer representatives like:

  • The Telecommunication Users Association of New Zealand (TUANZ)
  • Consumer New Zealand
  • Internet New Zealand.

Processes for engagement with regulated parties and stakeholders

Regular consultation occurs with regulated parties and stakeholders, including through monthly and quarterly meetings.

System's fitness for purpose

Effectiveness

System performing well against criteria

New Zealand has relatively high broadband connectivity, increasing speeds and declining prices for the services that are improving in quality. A significant build programme is underway through the Ultra Fast Broadband (UFB) and Rural Broadband Initiative (RBI) programmes and the Mobile Black Spots Fund (MBSF).

These programmes and initiatives are providing improved connectivity nationally. Once completed, New Zealand should be in the top five countries in the OECD for the proportion of the population that can access fibre.

The RBI programme is using a range of technologies to provide new or improved broadband to rural households and businesses. Deployment for the first phase of the RBI is complete; over 300,000 rural households and businesses can now access new or improved broadband and mobile coverage.

Digital communications technology is increasingly integrated into the functioning of our economy. However, the digital technology frontier is continually expanding, transforming the possibilities and demands on digital communications.

To better reflect the new environment, Telecommunications Act amendments have been enacted to create a more predictable utility-style regulatory framework for regulating fibre fixed-line services. Radio spectrum allocations are evolving to provide for wireless technology advances (such as 5G broadband, internet of things and satellite systems).

At the same time, the changing digital technology frontier is disrupting traditional industries such as post and copper fixed-line services. Increased competition from new technologies is creating opportunities for deregulation (eg, copper lines) and reduced obligations (eg, for voice services and postal delivery).

Efficiency

System performing well against criteria

As indicated above, New Zealand is in the midst of a major upgrade of its telecommunications infrastructure. Improved mobile and broadband coverage in New Zealand is being provided by network operators in partnership with government. Over $2 billion has been allocated to three programmes – the Ultra Fast Broadband (UFB) programme, the Rural Broadband Initiative (RBI) and the Mobile Black Spots Fund (MBSF).

UFB fibre wholesale prices are currently set through partnership contracts with the Crown. These arrangements have been monitored and enforced by Crown Infrastructure Partners (CIP), on behalf of the Crown, delivering stable efficient prices for fibre services over the periods of the contracts. The RBI and MBSF programmes are also administered by CIP on behalf of the Crown.

With the enactment of the Telecommunications (New Regulatory Framework) Amendment Act 2018, a transition to a new regulatory model has commenced, providing longer-term certainty. The Amendment Act has established a more predictable regulatory framework for fibre access services. The new framework provides the means to remove unnecessary copper regulation, enables further streamlining of regulatory processes and will provide more regulatory oversight of retail service quality.

These changes will give investors more certainty to continue investment in fibre networks, and will ensure consumers are well served by wholesale operators like Chorus and retailers like Spark and Vodafone, with wholesale price and regulated revenue constraints. Consumers will also be able to look forward to new regulatory arrangements that from 2022 will provide more transparency and predictability for pricing longer-term, and a better specification of retail service quality.

Spectrum allocation uses contestable mechanisms for cellular/wireless broadband and broadcasting services. We monitor spectrum use and developments to plan future allocations. Improvements in processing efficiency for radio spectrum licences have reduced administrative costs for government.

Resilience

System has some issues against criteria

The communications market regulatory system is facing significant technological and market developments. Parts of the system have stood up well in adapting to change (eg, spectrum allocation). Some parts require updating.

The Radiocommunications Act has recently been reviewed for its fitness for purpose in light of technology and industry developments. The conclusion was that the underpinning system remains sound but with technical changes to improve operation and reflect current management practice.

The communications industry has faced significant pressure following the November 2016 Kaikoura earthquake. Operators generally performed well and worked together to quickly restore services. Operators are cooperating to improve Wellington’s resilience.

In the future, it is anticipated that over-the-top services and application firms will increasingly challenge a regulatory approach that focuses on channels and communications as the service. This is an area that requires ongoing monitoring to ensure the current regulatory model remains fit-for-purpose and meets consumers’ needs.

Fairness and accountability

System performing well against criteria

The Commerce Commission provides independent decision-making, and substantive decision review and accountability mechanisms are hard-wired into the regulatory system. Our practice is to undertake extensive stakeholder consultation (eg, radio spectrum allocation, Radiocommunications Act, broadband investment and post-2022 regulation).

Proposed regulatory changes

MBIE’s current focus is working with the Commerce Commission to establish the new rules and procedures for implementing the Telecommunications (New Regulatory Framework) Amendment Act 2018. The Act will create a more predictable regulatory environment for fibre services by regulating these services and infrastructure through a new form of utility regulation.

This work will be conducted throughout 2019/20 and 20200/21 to prepare for commencement of the New Regulatory Framework by 1 January 2022. See the table below for further detail on the proposed regulatory provisions associated with this new regulatory framework.

Matter name Policy intent Planned consultation Status

Implementation of new regulatory provisions provided by the Telecommunications (New Regulatory Framework) Amendment Act

Matter type: Legislative instruments

To develop new input methodologies – rules, requirements and processes – for fibre fixed line access services.

To set the minimum consumer protection requirements that will need to be met before Chorus can stop providing copper services

To establish rules for the collection of retail service quality data in order to meet monitoring requirements.

Consultation processes on proposals for implementing the different regulatory provisions are at various stages.

Radiocommunications Amendment Bill

Matter type: Bills

Clarifying the way competition issues are addressed for Crown-held spectrum, and updating the electronic countermeasures in the Act and the technical operation of the Act.

On hold

This matter has been deferred until completion of 5G spectrum allocations in 2020. Policy decisions are to be sought after 2021.

Planned service and operational changes

Commerce Commission establishing new rules and guidance for enforcement

The Commerce Commission’s telecommunications enforcement functions and powers have been augmented by the Telecommunications (New Regulatory Framework) Amendment Act 2018. The Commission is in the process of developing and updating guidance and rules associated with these new powers.

Last updated: 31 May 2019