The Commerce Commission has today released its final report recommending that Spark’s resale copper voice services be removed from Schedule 1 of the Telecommunications Act.
Some retailers currently re-brand and re-sell Spark’s voice service by commercial agreement rather than invest in the necessary infrastructure. The resale service is in the Act as a backstop in case competition for the supply of voice services is found to not be strong enough and regulation is needed quickly.
“As signalled in our draft report in April, we are satisfied that retailers can provide the voice service over fibre and other networks to almost all New Zealanders. Competition in this market is now well-established and no longer depends on the resale of copper voice services from Spark,” Telecommunications Commissioner Dr Stephen Gale said.
“Consultation on our draft report supports our view and we are recommending that the Minister of Communications remove the relevant provisions from the Act.”
The few remaining consumers who only buy a voice service on a copper line, and effectively have no option other than to receive that service from Spark, will continue to be protected by a price cap in the Telecommunications Service Obligations.
The final report and related information can be found here.
The Commission can specify and enforce terms for any regulated wholesale services listed in Schedule 1 of the Telecommunications Act 2001, and regularly reviews these services. As markets evolve, new retail services are developed and wholesale service providers can face increased competition. In these situations, it may be preferable to deregulate a service through removing it from Schedule 1.
In 2016 we completed an investigation into deregulating Spark’s three resale voice services. Our recommendation to the Minister of Communications was not to deregulate at that time, and to defer the decision for two years, as we were concerned that competitive alternatives to Spark's resale services may not be sufficiently available and retailers’ ability to switch to these alternatives may have been constrained.
Today’s final report outlines the amendments we wish to make to our recommendations to the Minister from our 2016 final report.