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
The Commission is currently in the process of determining the first price-quality (“PQ”) path for Chorus Limited (“Chorus”) and the information disclosure requirements (“ID”) that will apply to Chorus and the other local fibre companies (“LFCs”) under section 170 of the Act.
In the course of that process, the Commission has identified:
- certain circumstances where amendments to the fibre IMs are necessary to implement draft decisions that it is planning to make for its first PQ path and its ID requirements; and
- certain circumstances where amendments to the fibre IMs would enhance certainty about the rules, requirements and processes that apply to PQ paths and ID regulation.
Amendments That are Necessary to Implement Draft Decisions That the Commission is Planning to Make for its First PQ Path and ID Requirements
In order to implement draft decisions that the Commission is planning to make for its ID requirements, amendments to the fibre IMs for disclosure year 2022 for Enable Networks Limited, Northpower Fibre Limited, Northpower LFC2 Limited and UltraFast Fibre Limited are being considered, consisting of:
- amending the definition of “revaluation rate” for the Asset Valuation fibre IM in clause 2.2.11;
- amending the definition of “notional deductible interest” for the Taxation fibre IM in clause 2.3.1; and
- amending clauses 2.4.1(1)–(2), 2.4.3, 2.4.4(1) and 2.4.5(1) of the Cost of Capital fibre IM to change the timing of its weighted average cost of capital determinations.
In order to implement draft decisions that the Commission is planning to make in respect of quality for its first PQ path and ID requirements, amendments to the definition in clause 1.1.4(2) of the fibre IMs for “downtime” and clauses 2.5.1(1)(a)(ii) and 3.6.1(1)(a)(ii) of the Quality Dimensions fibre IM are being considered.
Amendments That Would Enhance Certainty About the Rules, Requirements and Processes That Apply to PQ Paths and ID Regulation
In order to enhance certainty about the rules, requirements and processes that apply to PQ paths and ID regulation, the following amendments to the fibre IMs are being considered:
- amendments to clarify that the definitions in clause 3.1.1 and 1.1.4(2) of the Specification of Price and Revenues fibre IM for “total FFLAS revenue”, “allowable revenue”, “pass-through costs” and “building blocks revenue” can be applied on a forecast basis; and
- amendments to clarify the meaning of “income” as used in clause B1.1.3(4)(a) of Schedule B 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 (6 weeks)||8 July 2021|
|Cross-submissions due from interested persons on potential fibre IM amendments (2 weeks)||22 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.