The Commerce Commission has issued a draft determination which proposes deregulation of copper services currently subject to standard terms determinations. If this proposal is confirmed, there will need to be a transition from regulated terms to commercial terms for these services.    

Here we set out a proposal for that transition. This proposal includes:  

1. What we are proposing when standard terms determinations no longer apply  
2. Objectives of commercial terms  
3. A process for transition to commercial terms  
4. An overview of what commercial terms may contain.  

1. What we are proposing  

When regulated copper terms are removed, we are proposing:  

• A new service appendix to the CSA for ‘Transitional Unbundled Bitstream Access’ (TUBA).  Instances of regulated UBA will move to TUBA.    
• Amendments to the Baseband (non-FTTH) service appendix under the CSA to reflect the withdrawal of the UCLF standard terms determination.  

In this proposal the new TUBA terms and amended Baseband terms are referred to as the “commercial copper terms”.  

2. Objectives of commercial copper terms  

The commercial copper terms will govern the provision of copper broadband and voice services during the retirement of the network.  The copper network will be retired by 2030. In setting terms to manage the services to retirement, our objectives are to provide:  

• Certainty to our RSP partners and customers around the process of service withdrawal based on our learnings from the copper withdrawal process in fibre areas;  
• A clear price path to retirement that reflects the costs of providing copper service as connection numbers reduce;  
• Streamlining and removal of service aspects that no longer make sense in the context of a network being retired; and  
• Minimal other changes to terms and processes to avoid imposing costs on any party recognising that investment in services being withdrawn is wasteful.  

3. Process  

This consultation is the first step in the transition to commercial copper terms.  

We will consider responses to this consultation and produce draft commercial copper terms.  You will have a further opportunity to provide feedback on the draft terms.  

Following feedback on the draft commercial copper terms, we will publish final commercial copper terms.  

When final commercial copper terms are published:  

• we will set a date for transition to the commercial copper terms: ‘transition day’.  You do not have to do anything.  Services being taken on transition day will automatically move to the commercial copper terms.  
• you will have the opportunity to reject the commercial copper terms if you do not wish to take copper services on these terms.  If you reject the commercial copper terms, your UBA and Baseband services will terminate on transition day.  

We will provide sufficient time between publication of final commercial copper terms and transition day to allow you to consider whether to reject the terms and, if necessary, to inform your customers of a decision to terminate rather than accept the new terms.  

Between deregulation and transition day copper services will be provided on a commercial basis on terms that reflect the standard terms determinations immediately prior to deregulation.  

Subject to deregulation taking place, the below table illustrates an indicative timetable for transition to commercial copper terms:  

4. Content of commercial copper terms  

Withdrawal process  

We understand the importance to our RSP partners and end-users of having a clear process for withdrawal of copper services.  In the commercial copper terms, we intend to commit to a process for withdrawal of copper services to provide both our RSP partners and end-users sufficient time and support to transition to an alternative service.  The withdrawal process we include in commercial terms will reflect our commitment to:  

• A process based on the Copper Withdrawal Code whereby Chorus will issue end-users with three notices prior to withdrawal of copper service.  The first withdrawal notice will be given no less than six months prior to the withdrawal date.  
• Inform our RSP partners no less than 4 weeks prior to issuing a first withdrawal notice to their customers.  

Separately, we note that the Commerce Commission and other stakeholders have indicated a desire for a managed withdrawal framework for copper retirement.  We believe that a process committed to on a contractual basis as described above can form part of that.  Any withdrawal process in commercial copper terms will obviously need to align with commitments made elsewhere in relation to the copper retirement process.

Price path  

The commercial copper terms will include a price path to retirement.

The price path will reflect the costs of providing copper services as the network is retired.  The price path will depend on a number of factors including:

• Timing of deregulation taking effect.
• The costs of a managed withdrawal process and commitments Chorus makes regarding copper retirement.  
• Those elements of the current regulated services we can stop providing when we move to commercial copper terms.  We have proposed some streamlining opportunities for your feedback below.

We will set out proposed price paths when we have clarity on the factors described above.  

Streamlining  

We will remove certain transactions and systems that no longer make sense to maintain in a service being retired.  At this stage, we are proposing to:  

• Put TUBA and Baseband into immediate ‘stop sell’ and retire ordering systems. (Baseband for TSO purposes may be temporarily exempted);  
• Remove EUBA variants (EUBA 40, 90, 180) and move to a single service plan;  
• Remove copper pre-qualification;  
• Remove copper service availability from tools including Broadband availability API and Chorus coverage maps;    
• Remove forecasting processes and requirements;  
• Remove modem installation and approved modem list;  
• Expand the existing process to expedite transition to alternative services in the event of a complex copper fault repair;  
• End regular reporting including service level reporting and remove ‘reporting only’ service levels;  
• Remove the ability to transfer services from one provider to another.  

Other services  

The Commission’s investigation into copper services also covers UBA & UCLF Backhaul, and UCLF Co-location.  We do not currently sell any instances of these services and they will be withdrawn immediately upon deregulation.