Telecommunications from 2020: “To UFB, and Beyond!”

Telecommunications from 2020: “To UFB, and Beyond!”

The Internet creates lots of great opportunities for communication and for commerce - but that’s no good if you can’t get a good Internet service at a reasonable price. The government is currently reviewing the rules in this area - from 2020, these rules will determine how good our services are, and how much we pay for them. InternetNZ is engaging with that process to support better services, at fair prices, throughout New Zealand.

In our formal submission, we have called for a focus on delivering the potential of our networks. With UFB fibre reaching most of the places we work and live, and with faster wireless networks beyond that, we can sum up this potential in one word: “faster”.

Allow cross-submissions to refine people’s perspectives

While the goal is faster services, right now we have to balance a need for speed with the need to talk through the issues and get our approach right. Issues in this area are complex, and everyone from users to retailers to network operators sees them in a different way. On the other hand, we need clear and decisive decisions about our framework, to give predictability and enable investment in better services.

The best approach balances both needs. It’s better to allow up-front discussion and exchange of views, to inform clear and decisive outcomes. Without that up-front discussion, there’s a risk of disputes down the track which slow progress.

We have called for a cross-submission process to achieve this balance. Let’s get a broad exchange of views, to get our framework right first time, so we can get on with delivering better services.

What do people want from our framework?

Speaking of the different points of view, we’ve had a go at setting them out. We asked “what might each group want from our telco framework?”:


In UFB areas (80%)

Ambitious goals to unlock the potential of NZ’s fibre network: a baseline of gigabit symmetrical speeds by 2025.

Beyond UFB (19%)

Better fixed and wireless services, with innovation delivering better options, and competition between modes driving great service and prices.

The most remote (1%)

Better services delivered efficiently, with wise public investment programmes like the RBI to reach users who’d otherwise miss out.

Those stuck on copper

Better alternatives to copper, and no big price increases.

Network Providers


Regulatory stability to support efficient investments.

Retail ISPs


A predictable path for service quality and prices.



An efficient, transparent, and fair telecommunications industry, delivering good services and price stability.

Everyone wants clear policy direction

Though there are some different perspectives there, we think there’s a shared interest in clear policy direction, informed by broad up-front discussion. Better services need investment, and that investment depends on predictability. Signals on some things, like how copper networks will be managed, affect investment choices right now.

We’ve called for a broad discussion - for our part, we’ve identified some key opportunities and risks, and have suggested some ways of efficiently responding to those.

Support efficient investment

Faster Fibre - from Gigatown to Giganation?

This week saw Chorus announce Gigabit services available to all their fibre users from October - expanding their current “Gigatown” service in Dunedin. With earlier announcements of Gigabit services from the “LFCs” - local fibre companies Northpower, Enable Networks, and Ultrafast Fibre - this means Gigabit services will be available to the 80% of us with fibre access. That’s a pretty good set of Gigacities and Gigatowns - almost a “Giganation”. Those fast speeds enable new possibilities for learning, communicating, and doing business.

With Gigabit speeds available in 2016, we think broad access to even faster services, delivering the potential of our fibre network, will have to be part of our post-2020 framework.

To UFB, and Beyond!

For New Zealanders not reached by fibre, the technology might look different, but better services will be underpinned by the same need for efficient investment. New Zealand’s geography means that, for many people, wireless options are likely to be the best way to connect. Fortunately, that’s not a consolation prize - wireless speeds and reliability are progressing rapidly. For example, we recently saw significantly faster wireless speeds announced as part of the Rural Broadband Initiative.

Progress in wireless, allowing better services, will be particularly important outside UFB fibre areas. Let’s see how this looks with a map. On the left we have UFB fibre, heavily concentrated in the places most of us live and work. On the right, a map of wireless connectivity which goes far beyond that:

Images created via the NZ Broadband Map -

These maps show that, as wonderful as UFB fibre is, it’s not a solution for everywhere in New Zealand. The good news is that around the world, wireless technology is attractive precisely because of its broad coverage which does not rely on wiring every address. This drives innovation - innovation which can benefit New Zealand. We just need a telco framework which encourages efficient investment in better technologies over time.

Our proposal: “The Chorus fibre footprint RAB”

We want people to benefit from faster fibre and wireless technologies - that means thinking hard about the role of copper. As new alternatives improve over time, copper will become comparatively older, slower, and more expensive to run. Users will migrate to better options, posing a challenge: “how do we best allow copper migration to happen? For those who remain, how should we handle increasing per-user costs?”.

We don’t think copper migration should be delayed - instead, it should be allowed to happen while managing the risk of big price shocks. In the medium-term, all users will benefit from access to better alternatives - particularly rural and remote users currently limited to copper. Enabling that access means enabling investment in those alternatives, which might require some tough short-term decisions about Chorus’ RAB.

What’s a “RAB”? It’s a “regulated asset base” - the optical fibre, central exchanges, and other things a network provider owns and uses to deliver Internet services. The review proposes to count up the value of these things for each operator, setting a RAB value, which then determines how much that operator can earn from their regulated services.

We’re proposing, under the new “utility style” model for setting prices:

  • That Chorus’ regulated assets be limited to its fibre and to copper in UFB areas;
  • That copper in the LFC areas be fully depreciated;
  • That both copper and fibre be required to provide “anchor services” - services with a binding minimum performance and maximum price.

We think this proposal is a fair balance between limiting effects on copper users while maintaining reasonable incentives to migration, and to investment in better options for users.

What’s the alternative? Just keeping copper prices down, though it might feel easier in the short-term, would ultimately mean worse outcomes for users. Changes in technology will come, and it’s better to plan for that change. We’re saying New Zealand’s telecommunications industry is better off “eating its veggies” now, so it can grow up big and strong down the track.

Our proposal: “A nationwide essential service product”

We think that all New Zealanders should have at least basic Internet service. That aligns with the Government’s 2025 target that 99% of New Zealanders will have access to 50 Mbps services, and even the most remote 1% will have access to 10 Mbps services.

We propose a tech-neutral “essential services” product to deliver this basic access. It should:

  • Specify a minimum performance level, and maximum price for nationwide access;
  • Be compatible with different infrastructure - for example, it should have specified minimums for “calling minutes” and/or “monthly data” to allow for delivery by mobile operators;
  • Improve over time, on a path which meets or exceeds the 2025 targets.

Our proposal: “Attractive, measurable, dynamic anchors”

The MBIE options paper proposes “anchor products” with a set performance level, and a maximum price. We think that’s a good idea, but the specific products suggested are too slow for a future-proof framework.

We propose that anchors should:

  • Be fast enough to attract a significant proportion of users;
  • Have measurable and enforceable minimum performance levels;
  • Have clear consequences for falling short - we suggest that prices would drop to match actual performance;
  • Improve by default - getting faster according to a specified formula.

We think that a set of attractive, measurable, and dynamic anchor products will play a useful role in sharing the benefits of better technology. With Gigabit fibre services offered in 2016, we expect some anchors to be that fast or faster to remain relevant from 2020.

Summing up

We think there’s an exciting potential for the Internet in New Zealand, enabled by current and future investments in better technology. We want to see that potential delivered. That means having the right conversations now, to agree our priorities and set a clear direction for progress.

We’ve proposed some ideas for achieving that progress, but we’d also love to hear yours.