Telecommunications regulation in New Zealand
The 2001 Telecommunications Act and its later amendments set the ground rules for industry regulation.
Its goal is to promote competition between telcos so customers get the benefits of increased choice, better services and lower prices.
Before the Act, New Zealand’s telecommunications market was dominated by a private monopoly that emerged from the sale of the state-owned monopoly.
While critics at the time argued the Act merely managed the monopoly instead of breaking it, the legislation was a crucial turning point. It moved the sector from a monopoly with virtually no oversight toward the utility-style market we see today.
Who oversees telecommunications
Among other measures, the Act saw the appointment of a Telecommunications Commissioner to oversee regulation.
The commissioner works with a team at the Commerce Commission.
New Zealand does not always have a dedicated telecommunications minister. At times the role is wrapped into a wider portfolio.
Ministers often initiate regulatory reviews, suggest areas that need work. On occasion they are much more hands-on. The 2011 structural separation was the result of a minister’s intervention.
Other laws affecting regulation
The 2013 Telecommunications Interception Capability and Security Act or TICSA aims to protect networks from foreign interference and provides law enforcement and other security agencies with legal interception capabilities.
New Zealand’s Radiocommunications Act 1989 manages the wireless infrastructure—radio spectrum for 5G and satellite.
Codes of practice
In addition to the legislation, there are industry codes of practice. These are operational rules that are underpinned by the Act. In some cases they are developed by the industry’s own body: the Telecommunications Forum (TCF).
These are the "rules of the road" for daily operations, developed by the industry but backstopped by the Act to ensure they have teeth.
Key regulatory turning points
- The 2001 Telecommunications Act.
- The 2006 amendment which had the effect of unbundling the local loop and operational separation. Unbundling refers to opening up exchanges to competitors so they could install their own hardware and sell their own services. Operational separation saw the monopoly split into separate network and retail divisions.
- Structural separation in 2011 saw the network and retail divisions become distinct companies in order to build the UFB fibre network. Three other regional fibre companies entered the market and terms were introduced that forbid network companies from retail activities.
- Fibre-era reset A 2018 Act amendment set up regulations which view the now built fibre network as a utility similar to electricity. This introduced the Building Block Model where the Commerce Commission caps revenue to prevent excessive pricing.
With the major structural issues resolved, today’s regulatory focus is on managing the "post-fibre" era and dealing with service quality while addressing modern challenges like offshore providers and rural digital divides.
Mobile regulation
A key moment in the mobile telecoms sector was when the Commerce Commission began regulating Mobile termination rates in 2010. These are the fees mobile networks charge when one network’s calls are received by another network.
Regulating MTRs removed a barrier to new market entrants and paved the way for New Zealand’s mobile duopoly to become a three-player market.
There are also regulations about national roaming, which allows customers on one network use another network’s towers in places their provider doesn’t have coverage.
Mobile Co-location regulations require carriers to share physical cell site infrastructure with other carriers.
Number Portability means that customers can keep their existing phone number when changing service provider.
Telecommunications Development Levy
Strictly speaking the Telecommunications Development Levy (TDL) is not a regulation, but a tax on industry players used to fund essential non-commercial infrastructure, including rural broadband and the 111 emergency service.
Regulatory review
The Ministry for Regulation is reviewing telecommunications regulations. It aims to check that the existing rules and the regulatory framework remains relevant in light of technology and market changes. Among other matters it will consider telecommunications service obligations (TSO) and retail service quality regulations.
Further reading on regulation:
This page is part of a series of background briefings on New Zealand’s telecommunications industry: