Commerce Commission considers deregulating copper network

The regulation was introduced in the 2000s with the express purpose of preventing a natural monopoly over internet connectivity.

This allowed the Commerce Commission to set price and non-price access terms for the service.

Subsequently, in 2016, the Commission reviewed the relevant copper services, finding there weren’t grounds to commence an investigation because they were still in use.

Now, the Commission argues there have been numerous technological developments in the industry which mean that most New Zealanders have access to modern fibre networks or alternative technologies like satellite internet.

Already, regulation of the copper network has been removed in urban areas where fibre or another form of internet connection is more available.

However, this would specifically impact rural New Zealand which has largely relied on the copper network in the past.

Chorus, which manages the network, previously announced its intention to shut down the copper network in all areas where fibre is available due to its age.

The Commerce Commission’s draft recommendation says that deregulating the copper network would enable Chorus to withdraw copper network services used by consumers in rural areas.

“Since Chorus plans to stop using copper by 2030, we believe it is important to have a managed withdrawal process to protect rural consumers during any change,” the report says.

“Rural consumers will not benefit from the protections of the Copper Withdrawal Code (CWC), which was created to help manage the phase-out of copper in urban areas. We think it is important to extend CWC-type protections into non-fibre areas.”

The Commission says that this extension could be implemented either through legislative change or through commercial undertakings by Chorus.

Currently, approximately 80,000 rural premises have a copper line enabling them to access copper-based services.

Telecommunications commissioner, Tristan Gilbertson, says technological shifts have eroded the concerns that led to the network being regulated two decades ago.

He says most rural consumers now have access to alternative technologies like Starlink and lower cost wireless services.

Meanwhile, Chorus executive general manager of Fibre Frontier Anna Mitchell says the copper network is end of life technology, prone to faults.

She says it is not sustainable or suitable to meet the growing connectivity needs of New Zealanders.

“We have found that consumers are already increasingly turning to better technologies for connectivity such as fibre (where it’s available), wireless and satellite services,” Mitchell told Rural News.

“Copper lines have a high fault rate, are vulnerable to weather events, and degrade over time,” she says. “For example, during the Auckland floods in January 2023, the fault rate on copper was 10 times that of fibre and during Cyclone Gabrielle, eastern North Island premises on copper were eight times more likely to lose service.

“We want Kiwis to be on the best available connectivity to support digital growth and prosperity, and the reality is modern alternatives are better equipped now to provide the speeds and service quality required for current and future data needs.

“Chorus is committed to a clear consumer-centric retirement process that supports transition of customers still on copper to modern services.”

The Commerce Commission is seeking views on its draft regulation by 9 April, 2025. Cross-submissions will then be invited by 5 May, 2025.