New Zealand is moving towards “utility style” regulation for ultra-fast broadband (UFB) copper and fibre networks. Its main focus is on the application of price–quality regulation based on the ‘building blocks’ model (BBM).
The BBM is just one step towards the utility style regulation. New Zealand has the opportunity to also adopt utility style wholesale pricing which addresses its concerns about affordable anchor products while also encouraging adoption and use of broadband networks.
For more, see Economuse 2016-08-29
All submissions at http://www.mbie.govt.nz/info-services/sectors-industries/technology-communications/communications/regulating-the-telecommunications-sector/review-of-the-telecommunications-act-2001/submissions-received-options-paper
The Ministry of Business Innovation and employment NZ is moving to the building block method (BBM) adopted by the ACCC some years ago.There are several ultra-fast broadband providers in NZ and one of them also has a copper network with no decommissioning deadline. The Ministry is seeking views on how this wholesale sector should be regulated from 2020.
My submission suggests that the BBM is just one step towards the utility style regulation that it wants. NZ has the opportunity to also adopt utility style wholesale pricing which addresses its concerns about anchor products, encourages adoption and use of broadband networks while avoiding the mistakes made by Canada and Australia.
The submission can be accessed here: NZ-2016
NBN Co.’s July consultation paper on pricing and billing has wilfully ignored the only serious option that has been put up against its own product and pricing construct. Unless it is changed, the NBN will not be affordable and will not increase broadband utilisation.
This paper calibrates the options against the 2012-2015 NBN Corporate Plan and other analysis.
It includes the “traffic model” as Option 6 and concludes that this will make the NBN more affordable and give the industry the certainty is seeks in future reductions in unit traffic charges.
The paper can found by clicking here: Economuse 2014-08-14
This paper complements others written about the Traffic Model. It is described as Option 6 because it was wilfully neglected in the Options considered by NBN Co. in its July 2014 consultation paper.
The wholesale tariffs in this paper were calibrated from retail broadband prices at September 2013 and the revenues are compared with those in NBN Co.’s 2012-2015 Corporate Plan (the only publicly available plan currently).
It is interesting to note that despite a very low entry level (Starter) tariff of $10pm compared with NBN Co.’s $24 pm (includes CVC component); the Traffic Model is viable.
The Traffic Model is a better match with real consumer expectations and policy goals than NBN Co.’s current revenue model.
The 4 page paper can be accessed by clicking Option 6
The focus of NBN Co. management has been on supply – stabilising the roll out of the access network under the new design rules intended to make the NBN available more quickly and more cheaply.
The focus needs to shift to demand – what pricing structure will efficiently recover costs, achieve policy objectives and promote the adoption and utilisation of the NBN?
This opinion piece explains why the current AVC/CVC pricing model is flawed and needs to be reviewed before the next corporate plan is completed.
For more, see Economuse 2014-06-10