The Commerce Commission has unveiled proposed changes to the rules governing New Zealand’s fibre networks, aiming to encourage continued investment while safeguarding prices and service quality for consumers.
The draft proposals are part of the regulator’s first review of the Fibre Input Methodologies (IMs), which underpin how fibre services are regulated under the Telecommunications Act. The IMs set out how prices are determined, how assets are valued, and the processes used to regulate fibre providers.
Telecommunications Commissioner Tristan Gilbertson said the review is focused on ensuring the framework remains effective in a fast-changing market.
“Fibre broadband is used by millions of Kiwis every day to work, study, conduct business and stay connected,” Gilbertson said.
“Our job is to make sure the rules support ongoing investment in world-class fibre networks and services that are critical to New Zealand’s digital economy.”
He added that while the current rules are broadly working well, the proposed changes are designed to “simplify and streamline” the system so it remains fit for purpose as the sector evolves.
Investment clarity and expansion focus
A key proposal introduces a clearer investment test for large-scale fibre network expansion projects. The Commission says this would reduce uncertainty by setting out in advance how such investments will be assessed.
Under the draft framework, major expansion proposals—such as those led by network operator Chorus—would be evaluated using a cost-benefit approach. This would include analysing how much value consumers place on fibre services, including their willingness to pay.
The Commission believes this clarity will help ensure expansion occurs where there is a strong commercial case and clear benefits for users.
Streamlining regulatory processes
The draft decision also proposes improvements to how capital expenditure plans are assessed. These include clearer information requirements and adjustments to regulatory timelines, aimed at making the system more predictable and efficient for industry participants.
Other suggested changes cover areas such as the treatment of connection-related capital expenditure and insurance, alongside a range of smaller technical refinements.
Two-stage review underway
The IM review is being carried out in two stages. The current draft focuses on issues linked to the next fibre price-quality reset, scheduled to take effect from 2029.
A second stage will examine additional topics, including fibre-specific cost of capital settings. This work is being coordinated with a broader review of cost of capital rules across regulated infrastructure sectors.
Consultation now open
The Commission is seeking feedback on the proposals, with submissions open until 16 April 2026 and cross-submissions due by May 6.
Fibre Input Methodologies were first introduced in 2020 as part of a wider regulatory framework for fibre services. The Commission is required to review them at least every seven years.
Final decisions on this stage of the review are expected in the third quarter of 2026.
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