Download Weekly: ComCom Recommends Removing Rural Copper Regulations

Saturday, 15 March 2025, 5:31 pm
Article: Bill Bennett

Old school network no longer a monopoly

The Commerce Commission has issued a draft recommendation to remove the access regulations governing Chorus’ copper network in areas beyond the reach of the UFB fibre network.

For years copper enjoyed near-monopoly status. For many New Zealanders, especially those outside cities and towns, the only practical way to get phone or internet services was through the ageing copper telecommunications network.

The arrival of rural fixed wireless broadband from major carriers, the wireless broadband services offered by wisps and low earth satellite services mean rural users have a range of alternatives.

Rural users are already switching away from copper technologies. Chorus says there are around 80,000 remaining connections and the total dropped 21 percent last year. This is less than 10 percent of Chorus’ current connections.

Affordable alternatives for rural telecom users

Telecommunications Commissioner Tristan Gilbertson says most rural consumers now have access to three alternative affordable technologies that are more reliable than copper. In some areas these technologies can perform far better than copper.

In other words, there is now enough competition to relax regulations that were needed when the copper network dominated.

It’s not a done deal yet. As is its usual practice, the Commerce Commission has called for submissions on its draft recommendation to remove the regulations. A final decision will be made by the end of this year. At that point the Minister will decide whether to proceed.

What it means in practice

The practical consequences of deregulation are that Chorus would be able to move ahead withdrawing copper services. At present, regulations prevent it from halting services while consumers are still using the network.

Once the change goes through, those people will be encouraged to move to an alternative technology with Copper Withdrawal Code rules similar to those governing urban networks.

Chorus chief corporate and regulatory officer Julian Kersey says his company will have retired the copper network by 2030. Maintaining the network is increasingly unsustainable, with equipment makers no longer producing the hardware needed to support it.

He says: “We acknowledge the Commission’s comments on consumer protection. We are committed to a clear consumer-centric retirement process that supports transition of customers still on copper to modern services.”

Tuanz concerns on rural deregulation

In a media release Tuanz, the Technology Users Association says it fears rural copper deregulation could have a negative impact on communities: “especially as they already face the shutdown of the 3G mobile network this year”.

The organisation also mentions potential affordability issues and that vulnerable communities could be left without reliable and affordable internet or phone services.

Tuanz CEO Craig Young also wants to analyse the data behind the Commerce Commission statement that most rural users will have up to three alternative providers.

The issues surrounding rural copper deregulation are part of the lobby group’s recently revised agenda (covered in the most recent Download Weekly)

Young says this will be a key topic at the Tuanz Connecting Aotearoa Summit in May.

The Commerce Commission announced its investigation into relaxing rural copper regulation in August 2024.

Goldsmith flags further rural regulatory relief

Communications minister Paul Goldsmith says the government is working on a ’suite of regulatory changes aimed at improving telecommunication services for rural communities and promoting economic growth’.

The most important is the proposed removal of the regulatory barriers facing the local fibre companies: Enable Networks, Tuatahi First Fibre and Northpower Fibre. In future they will be allowed to deliver other wholesale services to their communities.

Other changes include reinstating the rights of fibre providers to access shared property to install fibre and an expansion of the “applicability of the telecommunications regulatory regime to offshore providers, where relevant to the services they offer”, which will include satellite service providers.

Perhaps the most controversial change is that the new regulations will mandate membership in the industry’s dispute resolution scheme for any telco with more than $10 million in revenue. At present membership is voluntary although there has been pressure from the Telecommunications Commissioner Tristan Gilbertson for all providers to join.

Tuatahi First Fibre says deregulation good for local fibre companies

Tuatahi First Fibre says regulatory changes will: “align local fibre company constitutions with the fibre regulatory framework, support competition and encourage investment in opportunities to improve connectivity”.

Chief executive John Hanna says the move will be a welcome relief. “The competitive environment we now live in has changed immensely, so we are thrilled that the government made this announcement to ensure our regulatory and constitutional settings are fit for purpose.”

He says deregulation means Tuatahi can consider investments in services related to fibre that could extend the network’s geographic reach, provide greater resilience and allow enhanced offerings.

Analysis: Rural deregulation

While acknowledging Tuanz’s concerns, the DSL technologies that use the copper network are coming to their natural end of life regardless of what happens to regulations.

It’s now near impossible to find parts needed to repair the crumbling, ancient hardware supporting the copper network. Even the skills needed for the work are on the way out as older engineers retire and younger ones are, understandably, trained for the future, not the past.

Let’s push ahead with the deregulation, but at the same time find the resources to ensure the people served by the 80,000 remaining copper connections have an affordable and meaningful alternative.

Tuatahi boss John Hanna suggests the rural regulatory changes currently being worked on the government could make it easier for fibre to extend its reach deeper into country areas. Let’s start by exploring that idea.

2degrees to offer satellite to handset service next year

2degrees says its deal with AST SpaceMobile means the telco could start offering satellite calling from next year. The service will operate both 4G and 5G cellular broadband services to conventional mobile handsets.

Two years ago 2degrees was working with rival satellite company Lynk and said it could be months away from offering satellite-to-mobile text messaging. At the time, the company said it was three years away from offering nationwide calling. The timetable remains the same, but the partner has changed.

Competing with One NZ and Starlink

The new service will compete with One New Zealand’s direct to mobile offering that uses the Starlink satellite network. One NZ has a considerable first mover advantage and an exclusive deal with Starlink.

Spark partnered with Lynk two years ago but is now understood to be preparing a similar announcement, potentially involving AST.

2degrees says it will build its own satellite ground station to support the service. Work on the station will start later this year.

Straight to broadband

Chief executive Mark Callander says: “What is particularly exciting about our partnership with AST SpaceMobile is that they are going straight to cellular broadband connectivity, not laddering through text, then voice, then data.”

He says his company will take a measured approach and work through regulatory processes and testing over the next year.

AST partners with telcos worldwide, whereas Starlink’s primary business is direct-to-consumer. AST focuses on direct satellite-to-phone services, while Starlink’s core business is selling broadband to home users with satellite dishes. This could make AST SpaceMobile a better long-term partner for a local telco as it has less incentive to poach business.

The newcomer operates a relatively small fleet of satellites at a higher orbit than the thousands of low earth orbit Starlink satellites. Long term the company is aiming for around 250 satellites while Starlink is unlikely to stop at 5000.

Spark gets closer to Hewlett Packard Enterprise

Spark says it has expanded its strategic partnership with Hewlett Packard Enterprise and will use HPE GreenLake hybrid cloud for its IT infrastructure. The move shifts Spark to a variable IT model, leveraging HPE’s global services while keeping full control over its internal IT.

Customer director Mark Beder says the partnership will cut IT costs and improve technology updates with automation and AI. Spark will also integrate HPE GreenLake’s Morpheus cloud management tools to simplify operations across public and private cloud services.

The agreement needs to be seen in the context of Spark’s SPK-26 Operate Program which is aiming for up to $100 million in net labour and Opex cost reductions this financial year (2025) and $140 million in annualised savings by the 2027 financial year.

Research from Kordia’s Business Cyber Security Report 2025 shows that nearly 60% of New Zealand businesses were hit by cyber-attacks in the past year, AI-powered threats and ransomware payments are top concerns.

In other news...

Earth's atmosphere is shrinking and thinning, which is bad news for Starlink and other LEO Sats
Simon Sharwood’s story at The Register covers what could become a major problem for those who are banking on low earth orbit satellites. He writes:

“Earth's atmosphere is shrinking due to climate change and one of the possible negative impacts is that space junk will stay in orbit for longer, bonk into other bits of space junk, and make so much mess that low Earth orbits become less useful.”

BCG: NZ must pick some new export winners
Heather Wright picks the news out of yet another consultant’s report warning about New Zealand’s lagging performance.

“...there’s been historic underinvestment in innovation. New Zealand’s R&D spend in 2019, as a proportion of GDP, was just 1.4 percent, well below the OECD average of 2.5 percent and even further behind innovation leaders such as Denmark (3.0 percent) and Israel (4.9 percent).”

NZ cloud cost overruns

The 2025 Global Cloud Storage Index Report from Wasabi Technologies reveals that New Zealand businesses are the worst in the world for exceeding their cloud storage budgets. The report found 76 percent of NZ respondents went over budget last year, this compares with an international average of 62 percent.

Going deeper, Wasabi found the overruns are largely due to access penalties with 44 percent of local organisations saying access and retrieval costs contribute most to the fees they are charged. This figure is the highest in the world.

Those high fees may be slowing businesses down and making them more vulnerable to attacks.

Five years ago:

Chorus saw its biggest data surge since the Rugby World Cup. At first network strategy manager Kurt Rodgers thought it might be down to the pandemic lockdown, but there was another explanation.

The Download Weekly is supported by Chorus New Zealand.

© Scoop Media

Bill Bennett

Freelance journalist.

Auckland-based Bill Bennett writes technology and business stories that are directly relevant to New Zealand readers.

His emphasis is on telecommunications, but he also covers other aspects of technology and business. You can find his features in the New Zealand Herald and hear him regularly on RNZ Nine to Noon and the NZ Tech Podcast.

Bennett's The Download Weekly newsletter is published every Friday. You can sign up for it here. If you want to support his work, you can make a donation to his PressPatron account.

Contact Bill Bennett

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