Final report on regulation of co-location services

Final report issued on the regulation of co-location services

The Commerce Commission has issued its final recommendation to the Minister of Communications on the regulation of mobile co-location services on cellular transmission sites.

Co-location allows the mobile equipment of a network operator to be installed on another operator's tower. This can reduce the costs associated with the setting up of cell sites by sharing facilities between network operators.

The Commission recommends that the regulatory settings for co-location should not include price. Non-price elements are already subject to regulation.

The Commission also considered the co-location undertaking submitted by Vodafone as an alternative to regulation. The Commission's recommendation is that Vodafone's undertaking be rejected as it believes that the undertaking is not likely to promote new entry into the New Zealand mobile market.

"The Commission recognises that there are factors preventing effective co-location in the mobile services market – but these are not related to price" said Telecommunication Commissioner Dr. Ross Patterson. "The Commission will use the powers it already has to deal with non price issues. We will launch a standard terms development process to determine the non-price elements of the co-location service."

"Although a Co-location Code has been agreed to by the telecommunications industry, it has yet to result in any co-location" said Dr. Patterson. "By launching a standard terms process, the Commission will be able to develop more effective co-location arrangements, as we have recently done in relation to unbundled local loop services".

Dr. Patterson said that the Commission will monitor co-location prices closely, and will act quickly if problems emerge for access seekers.

Commercial agreement has been reached between Vodafone and New Zealand Communications for roaming. The Commission will defer its final recommendation on roaming until it is clear whether the conditions of the agreement have been satisfied. The Commission expects this to be clear by February.

The recommendation on co-location services is available on the Commission's website: www.comcom.govt.nz, under
Industry Regulation /Telecommunications/Investigations/mobilemarket

Background

On 16 November 2006, the Commission formally commenced the investigations into whether or not to amend the terms of the current roaming and co-location services under Schedule 3 of the Telecommunications Act 2001.

An undertakings regime was incorporated in the Act via the amendments made on 22 December 2006 which allows a relevant access provider to submit, as an alternative to regulation, proposed terms and conditions of supply of a service that the Commission is proposing to regulate.

On 19 January 2007, the Commission received an application for an undertaking from Vodafone, and following consultation received an amended undertaking from Vodafone.

On 3 August the Commission issued a draft report rejecting Vodafone's undertaking and recommending that the non-price terms of the roaming service be amended and that the roaming service should become a designated service. The draft report also recommended that the co-location service remain a specified service. However, the Commission considered that it was appropriate for changes to be made to the Co-location Code and the Master Co-location Agreement to cater for some unresolved issues.

On 2 November the Commission received two undertakings from Vodafone, one for the roaming service and another for the co-location service.

ENDS

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