The Commerce Commission (“Commission”) gives notice under section 179(1) of the Telecommunications Act 2001 (“Act”) that it is beginning work to consider certain potential amendments to its input methodologies for fibre fixed line access services (“fibre IMs”).
A summary of the text of the notice which summarises the process that will be followed and the indicative time frames is set out below.
Scope of Potential Amendments to the Fibre IMs Under Consideration
Process for Determining Chorus’ Initial PQ RAB
The Commission is currently in the process of determining the first price-quality (“PQ”) path for Chorus Limited (“Chorus”) under section 170 of the Act, and have commenced evaluation of Chorus’ initial price-quality regulatory asset base proposal (“initial PQ RAB”) as part of that process. That initial evaluation has led the Commission to refine its intended process and time frame for determining Chorus’ actual initial PQ RAB.
In order to implement this proposed approach to determining Chorus’ initial PQ RAB, the following amendments to the fibre IMs are being considered:
- amendments to clause 3.1.1 of the Specification of Price and Revenues fibre IM;
- amendments to clause 3.3.1(8) and clause B1.1.5(1) of Schedule B of the Asset Valuation fibre IM;
- amendments to clause 3.5.7(2)(c)–(d) and clause 3.5.10(1)(d) of the Cost of Capital fibre IM; and
- amendments to the Capital Expenditure fibre IM to change the date by when we must determine a “base capex allowance” and “connection capex baseline allowance” for the first regulatory period, which would
- recognise anticipated changes to the time frame for this process; and
- ensure that cost allocation assessments across Chorus’ transitional initial PQ RAB and forecast capital expenditure for the first PQ path are aligned.
Amendments to Correct Technical Errors
The Commission is considering amendments which would correct the following technical errors in the fibre IMs:
- errors in its formulae in clause B1.1.2(5)–(6) of Schedule B of the fibre IMs for determining the “present value benefit of Crown financing”; and
- errors in its use of the terms “commissioned”, “commissioned for FFLAS”, “commissioning date”, “FFLAS commissioning date”, “regulated provider” and “regulated fibre service provider”, as defined in clause 1.1.4(2) of the fibre IMs.
Indicative Time Frames
|Process||Indicative time frame|
|Draft decisions by the Commission
Draft decisions on potential fibre IM amendments
|27 May 2021|
|Submissions due from interested persons on potential fibre IM amendments (4 weeks)||24 June 2021|
|Cross-submissions due from interested persons on potential fibre IM amendments (2 weeks)||8 July 2021|
|Final decisions by the Commission
Publication of final decisions on potential fibre IM amendments
The full text of the notice is available on the Commission’s website: https://comcom.govt.nz/regulated-industries/telecommunications/projects/fibre-price-quality-path-and-information-disclosure.