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.
On this page
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 framework for regulating fibre services – the Telecommunications (New Regulatory Framework) Amendment Act 2018 refers
- particular consumer protections for telecommunications end-users, including providing for:
- 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.
The communications markets system also incorporates regulatory powers and operational functions that support our national security system.
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 |
|---|---|
|
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. |
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. |
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 New Zealand Telecommunications Forum. We meet with relevant representatives to share information and monitor the progress of work programmes.
Regulated parties and main stakeholders
Regulated parties include:
- Telecommunications providers – both wholesale network providers and retailers
- Users of radio spectrum
- Suppliers of electrical, electronic or radio products
- Postal operators, as specified under the Postal Services Act 1988.
Main stakeholders
The NZ Telecommunications 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.
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.
Processes for engagement with regulated parties and stakeholders
Regular consultation occurs with regulated parties and stakeholders, including through monthly and quarterly meetings.
Any active proposals for consultation will be published on the Have your say page of our website:
Further details will be updated under the relevant area in the Our role in the ICT sector section of the website:
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).