Commission begins consultation on review

Commission begins consultation on review of non-price terms for Chorus’ UBA service

The Commerce Commission has today released a consultation document on the non-price terms of the Unbundled Bitstream Access (UBA) Standard Terms Determination (STD). The paper seeks views on the key issues the Commission intends to address in the review, as well as the proposed process.

The Commission is undertaking this review in order to ensure that the regulated UBA service meets the needs of typical end-users over the medium term.

UBA is one method of supplying broadband services – allowing retail telecommunications companies to provide internet services over Chorus’ copper network without the need to install their own equipment in exchanges. The UBA STD sets the price and technical features of the service that Chorus must offer to retail companies.

Telecommunications Commissioner Dr Stephen Gale said the UBA STD was first released in 2007, before Chorus was separated from Telecom, and the non-price terms now need to be reviewed to assess whether they are still fit for purpose in today’s environment.

“While the regulated UBA service has evolved over time, we recognise that there remains some uncertainty over what Chorus is required to provide. By clarifying the technical features our aim is to ensure the regulated service remains suitable for typical broadband customers, and allows Chorus to develop commercial variants for specific user groups.”

“Additionally, having recently completed our TSLRIC pricing review of the UBA service, this review will be helpful in considering whether and how the UBA service description and the TSLRIC pricing principle modelling decisions should be aligned.”

Background

Under the current UBA STD, Chorus must offer the designated UBA service at the regulated price but is able (subject to notifying the Commission) to offer commercial variants of UBA services at different prices.

On 14 May 2014, Chorus announced that it intended to introduce new commercial UBA services (Boost variants). As part of the introduction of the Boost variants, Chorus also proposed two changes to the regulated UBA service:

• capping aggregate throughput at the handover point; and
• withdrawing VDSL as a regulated UBA service.

After receiving a complaint from Telecom (now Spark) – that Chorus’ proposed changes to the regulated UBA service breached the UBA STD – the Commission commenced an investigation under section 156O of the Telecommunications Act on 22 July 2014.

The investigation was suspended on 16 October 2014 after Chorus put the proposed changes to the regulated UBA service on hold, including in particular, any constraints on the regulated service and the withdrawal of the current regulated VDSL service.

As a result of the issues identified during the investigation, the Commission published a consultation paper seeking views from the interested parties on whether it should undertake a review of the UBA STD under section 30R of the Telecommunications Act. The majority of the seven submissions received supported a review.

On 1 April 2015, the Commission announced that it would formally review the non-price terms of the UBA STD under the Telecommunications Act. At the same time, the Commission closed its investigation into Chorus’ proposed changes to the regulated UBA service.

In December 2015 the Commission set updated prices for Chorus’ UBA service, based on the TLSRIC pricing principle. As part of applying this principle, the Commission made modelling decisions about future end-user requirements which differ from the minimum service requirements in the UBA STD.

While the review is not expected to affect the UBA price, the Commission will consider if any updated calculation of the UBA price is necessary because of a ‘change in circumstances’, as required by 30P(1)(a)(ii) of the Act. However, at this stage we do not envisage that amendments to the UBA STD within the proposed scope will result in a requirement to amend the price.

For further information see the UBA page.

ENDS

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