UFBI 2.0: Revised separation boundaries may partially address pricing and uptake limitations in New Zealand fibre broadband model, but significant competition policy problems remain

Abstract

On July 1 2010 the Minister of Communications Steven Joyce announced fundamental changes to the structure and regulation of the New Zealand Government's Ultra-Fast Broadband Initiative. The changes were deemed necessary in order to achieve uptake targets sufficient to underpin the business case for both government and private sector investment. Whilst the changes would appear to enable progress towards the ability to access productive scale efficiencies and competitive pricing structures that will induce some degree of substitution lack of clarity about the future competitive environment still exposes investors in the sector to significant uncertainties and potential perverse outcomes. Consequently overall sector investment will likely be inhibited and the evolution of broadband sector institutions substantially constrained.