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The Commerce Commission touts New Zealand's broadband and mobile services as providing world-class performance at affordable levels in its Annual Telecommunications Monitoring Report 2021, released today.
But for Telecommunications Forum chief executive Paul Brislen - whose group represents Spark, Vodafone, 2degrees, Orcon Group, Chorus and other telcos - that's just more evidence the watchdog is spending millions in the wrong places.
"The telco sector is competitive, offers a great range of choices and price points, a range of technologies and is the only sector where prices consistently fall year after year," Brislen says.
"It is somewhat baffling that so much money is spent regulating a sector that is working well when there are other parts of the retail space clearly in need of improved regulation," he says, citing recent flare-ups over supermarket competition and prices at the pump.
A ComCom spokeswoman told the Herald that for the current financial year, the agency has budgeted $14.5 million to regulate the telco market, and $3.8m on fuel - which is due to rise to $4.8m next year. It is not funded to regulate the grocery sector, but has $2.6m a year for market study work and spent $3m on the supermarket study report, which was compiled over 16 months with its initial findings released in July.
She added that although there is no specific budget for grocery regulation, some of the watchdog's general enforcement activity includes the sector, such as its action against Pak'nSave Māngere, which in 2020 was fined $78,000 for discrepancies between advertised specials and prices charged at the till.
"If you asked most people which cost they're more concerned about, telecommunications or fuel, they wouldn't say telecommunications," Brislen says.
The Commerce Commission spokeswoman said the budgets for telecommunications and fuel regulation reflected the differing scope of the roles the watchdog was allocated under the Telecommunications Act (2001) and the Fuel Industry Act (2020).
Beyond the ComCom's own report, Brislen cites Statistics New Zealand figures that show phone and broadband costs falling for the past few years.
While the ComCom's report highlights graphs showing Kiwis using a third more data over the past year, at world-class speeds and affordability levels near the top of the OECD, Technology Users Group NZ (Tuanz) chief executive Craig Young says there are still plenty of pain points for the watchdog to chew on.
Our high-performance broadband and mobile plans are cheaper than the OECD average, but mid-price and budget plans are often still $5 or $6 a month more expensive.
The Commerce Commission started to push the retail telcos on service and support after telecommunications emerged as the most complained-about industry.
And in November, it gave telcos 60 working days to come up with a new marketing code that made customers' technology options, and the comparative costs, more clear. Final touches on a draft were only being put together this week. In Young's view, this regulation of marketing is sorely needed to remedy what he labels as a "confuseopoly" as copper services are turned off from this month and about 500,000 households weigh whether to upgrade to fixed-wireless or fibre.
Brislen responds: "There's always more we can do but when you consider the cost of regulation for telco, which is constantly increasing service levels and reducing price for consumers, versus fuel or groceries or any of the other sectors, it seems odd to spend quite so much regulating telco and not enough on the rest."
He says the commission's price comparison with other OECD countries is undermined by leaving out 2degrees.
And that although our broadband performance is ranked excellent, Brislen says it could be better if the commission monitored 5G (the regulator's benchmarks only include the slower 4G in its fixed-wireless broadband numbers). He also complains that it leaves out Hyperfibre - the fastest type of fibre plan.
Brislen also raises that only telecommunications has a dedicated commissioner - a key role a decade ago when Telecom was being cleaved in two and the public-private UFB rollout being put together, but one that some industry members see as less pressing in the relatively static post-UFB rollout era. The final stages of the rollout wind up this year, and the ComCom has already set the ground rules for the post-copper landscape.
"When I look at the shopping list of items the commission has laid out for regulation over the next two years, I can't help but think they're making work rather than solving problems. Regulation should be a principles-led process, not a KPI [key performance indicators] target for the commission to hit. Sadly, that's what regulation has become," Brislen says.
But as a consumer advocate, Tuanz's Young says he likes the commission's priority list for the next 24 months, which was laid out in a March 7 memo from the regulator called "Improving Retail Service Quality for Consumers", available online ).
Its agenda includes creating a mobile and broadband dashboard that will make product comparisons easier for punters, and addressing what the regulator says are issues around billing, termination fees, affordability and how debts are handled (the latter areas have already seen a degree of focus from telcos, with Spark, Vodafone and 2degrees easing credit and cut-off rules during the pandemic, along with measures like Spark's Skinny Jump programme to provide free or heavily subsidised broadband for students living in around 16,000 households on the wrong side of the digital divide).
"Users of communications services in NZ know that they are critical to living and working today, and yet we know that there is still an affordability issue at the lower end of the market - leading to a number of groups of people remaining unconnected or poorly connected," Young says.
"We welcome the commission's review of affordability to bring a full comparison with other developed markets as there are complexities in the way services are marketed that make these comparisons difficult."
Economists expect the recovery continued during the first quarter of the year.