2 February 2025
Sam Brown
[FYI request #33446 email]
Kia ora Sam
Official Information Act request 25.157
Thank you for your Official Information Act 1982 (the OIA) request of 6 January 2026, clarified
7 January 2026, for information in relation to rural connectivity infrastructure. We note the
context of your request is your concern that
current policy settings may result in irreversible
elimination of terrestrial rural connectivity infrastructure, with no feasible pathway to restore
competition if satellite pricing subsequently rises or service quality degrades.
We have responded to your questions in the order they were asked below.
1. Any analysis of barriers to market re-entry in rural telecommunications if terrestrial
providers exit due to unsustainable competition, including assessment of whether
infrastructure investment can be economically reconstituted if needed in future.
The Commission does not hold any such direct analysis, therefore, we must refuse this portion
of your request under section 18(e) of the OIA, because the information requested does not
exist.
However, it may interest you to know the Commission is currently undertaking some work that
references the competition effects of hypothetical fibre entry into rural broadband markets.
This paper – titled:
Fibre input methodologies review 2027 (Tranche 1) - draft decision – is still at
the draft stage but we would be looking to publish the final report on our website in March 2026.
2. Any assessment of "irreversible market exit" risks where capital-intensive infrastructure
businesses (such as terrestrial ISPs) cannot economically re-enter markets after exiting,
creating permanent market concentration, particularly in rural or isolated areas.
Again, the Commission has not undertaken any such assessment. We are therefore refusing
this portion of your request under section 18(e) of the OIA as well.
3. Any advice [both generated by the Commission or provided to the Commission]
regarding whether Commerce Act frameworks adequately consider scenarios where
short-term below-cost pricing by one competitor causes permanent exit of alternatives,
resulting in long-term consumer harm through subsequent price increases or service
degradation.
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As no such advise exists, the Commission is also refusing this portion of your request under
section 18(e) of the OIA.
4. Any analysis of whether regulatory intervention should occur before competitive
alternatives are eliminated, rather than attempting to restore competition after
infrastructure has been abandoned.
The Commission recently
published a report on telecommunications regulation in New Zealand
– covering its history, current state, and future direction – authored by Richard Feasey, an
international expert in telecommunications policy and regulation.
Paragraphs 168 to 179 as well as paragraph 345 touches on the matters raised by this question.
5. Any assessment of "stranded consumer" scenarios where rural customers become
dependent on a single provider with high switching costs (specialised equipment,
installation requirements) that reduce competitive constraint on that provider's
conduct.
As no such assessment has been conducted, the Commission is refusing this portion of your
request under section 18(e) of the OIA.
Further information
If you have any questions about this response, please do not hesitate to contact us at
[Commerce Commission request email].
If you are unhappy with our response, you have the right to complain to the Ombudsman.
Information about how to do this is available at
www.ombudsman.parliament.nz.
Finally, confirming the Commission may publish this response on our website as part of our
proactive release process. All personal information will be redacted prior to publication.
Ngā mihi nui
Adam McFerran
Senior Advisor | OIA & Information
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