The Commerce Commission (“Commission”) gives public notice under section 179(2) of the Telecommunications Act 2001 (“Act”) that it is proposing draft amendments to its input methodologies for fibre fixed line access services (“fibre IMs”).

Scope of the Amendments

During the process of determining the first price quality (PQ) path for Chorus Limited (“Chorus”) and the information disclosure (ID) requirements that will apply to Chorus and the other local fibre companies (LFCs) under section 170 of the Act, the Commission has identified certain circumstances where the following amendments are required to the fibre IMs.

1. Proposed amendments to implement its proposed approach for determining Chorus’ initial price-quality regulatory asset base (PQ RAB)

In order to implement its proposed approach for determining Chorus’ initial PQ RAB, the following amendments have been proposed:

• 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 clause 3.7.12(1)(a) and 3.7.20(1)(a) of the Capital Expenditure fibre IM to change the date by when the Commission must determine a “base capex allowance” and “connection capex baseline allowance” for the first regulatory period.

2. Proposed amendments to correct technical errors

In order to correct the technical errors, amendments have been proposed to its use of the term “commissioned” in clause 2.2.13(6)(b) of the fibre IMs.

3. Proposed amendments to implement certain draft decisions for the first PQ path and ID requirements

In order to implement draft decisions that the Commission has made for its ID requirements, the following amendments have been proposed to the fibre IMs for disclosure year 2022 for Enable Networks Limited, Northpower Fibre Limited and UltraFast Fibre:

• amendments to the definition of “revaluation rate” for the Asset Valuation fibre IM in clause 2.2.11;
• amendments to the definition of “notional deductible interest” for the Taxation fibre IM in clause 2.3.1; and
• amendments to 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 has made in respect of quality for its first PQ path and ID requirements, amendments have been proposed to change 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.

4. Proposed amendments to enhance certainty about the rules, requirements and processes that apply to PQ paths

In order to enhance certainty about the rules, requirements and processes that apply to PQ paths, amendments have been proposed 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.

Further Information

Copies of the draft fibre IM amendments, and the supporting draft reasons paper, are available on the Commission’s website via the fibre PQ and ID project page at https://comcom.govt.nz/regulated-industries/telecommunications/projects/fibre-price-quality-path-and-information-disclosure#projecttab, and for inspection free of charge, or for purchase at a reasonable price, at the Commission’s Office at 44 The Terrace, Wellington (during ordinary office hours).

The Commission is seeking submissions from interested persons on the draft fibre IM amendments proposed in paragraphs 1–2 by 5.00pm on 24 June 2021, and following submissions, the Commission invites cross-submissions on these matters by 5.00pm on 8 July 2021.

The Commission is seeking submissions from interested persons on the draft fibre IM amendments proposed in paragraphs 3–4 by 5.00pm on 8 July 2021, and following submissions, the Commission invites cross-submissions on these matters by 5.00pm on 22 July 2021.

Submissions on the draft fibre IM amendments can be made here: https://comcom.govt.nz/file-upload-form-folder/file-upload-form.

Dated at Wellington this 27th day of May 2021.

COMMERCE COMMISSION.