Today we are kicking off a process to transition from our current contractual state to provide you with fibre services on new contractual terms.  We’re calling these new contractual terms the 2022 CSA. We want to know who from your team are the key contacts for this transition and will participate in the upcoming Understand workshops in late October.

Background

We started this conversation with industry initially in 2018. At that stage, we expected the new regulatory building blocks model (BBM) to be implemented from 1 January 2022 and we wanted to get our contractual arrangements ready for that change. In the early stages of those industry discussions, the implementation date was extended by 2 years when the Government gave the Commerce Commission more time to develop the necessary input methodologies required under the BBM model. 

This delay in implementation meant transition of the contractual arrangements for fibre was not as time critical. We agreed with industry to park any transition until closer to the new implementation date of 1 January 2022.

 

What’s happening

Transition process kick-off

We are 15 months out from the BBM model being implemented.  It seems like the right time to pick up where we left off our initial transition discussions in 2018. So today we are re-starting our conversation with industry about transitioning to a new 2022 CSA. This transition is critical for two key reasons:

• Regulatory change - the change in regulatory environment means the existing contractual terms are no longer fit for purpose as they were developed to meet the obligations of an earlier regulatory model.  At a basic level, our fibre contract should reflect the regulatory environment in which we all operate.  For example, Crown Infrastructure Partners (CIP) will no longer be involved in UFB products and a distinction is introduced between anchor (regulated) and non-anchor (commercial) UFB services. These features need to inform our contractual arrangements.
• Benefit from operational experience - as an industry we now have nearly a decade of experience operating under the existing contract. We want to leverage this experience to identify current contractual ‘pain points’.  For example, in relation to the prescribed change process.  It is important to note that the transition also provides an opportunity to understand what has worked well – identifying what we should keep, or build on, as part of developing the 2022 CSA.

The focus of this transition will be on fibre services only. Our longer-term intention is to extend the 2022 CSA contractual framework over time to govern all services we provide.

Call for RSP collaboration and engagement

This transition process is an opportunity to develop contractual terms which are win-win, where we all see value in transitioning to those new terms.  We understand participation in a transition of this nature takes time and resource. It involves an opportunity cost assessment in the face of competing priorities. 

Your participation and input is critical. We need your support to help shape a contractual framework which is ‘fit for purpose’ - not just for Chorus but for RSPs and all of industry.

 

What are the details

Approach and timeline

We want to work with you to co-design what the 2022 CSA should look like; leveraging our learnings and experiences to date to inform what improvements could be made. We will be using a combination of scrum, design thinking, and human-centred design tools to establish an agreed contract framework - before we draft anything!

An agile approach encourages a focus on interests and not positions, unlike traditional contract negotiations.  We believe this gives us the best chance of finding constructive and creative ways to align priorities and ensure shared benefits for all of industry.

This is important as we want to collaborate with industry to develop a win-win balance of risks and rewards under the new 2022 CSA.

Our proposed timeline from now until the end of 2021 is set out below at a high-level.

 

RSP information pack

You can check out an information pack we’ve developed to give you more detail about the transition process, including how the understand and design phases will work, and insights from Chorus’ perspective of the ‘pain points’ under the current contractual arrangements. We’ve also developed Terms of Reference which will govern our engagement with you during this process (as referred to in the information pack).

The first key activity in the understand phase is workshops, which are designed to help us understand what RSPs believe is working well and current challenges under the existing contractual framework. These workshops are scheduled for the last week of October. The information pack contains more detail about how these workshops will be run.    

We’d really encourage you to participate fully in the workshop sessions to get the most benefit from this activity and the overall transition process. 

Initial feedback

As noted in the information pack, we’re keen to get your early feedback on two key issues relating to the transition process:

• Structure of the 2022 CSA - we are considering two possible approaches:
  • Option 1: using the existing contractual terms as a starting point, with a mark-up to reflect our agreed contractual framework developed from our agile engagement; or
  • Option 2: start with a blank page, with supporting collateral provided by us to support your review of the initial draft (i.e. key differences with existing terms summarised, clause cross-referencing etc.).

Our current preference is to start with a blank page, as it is consistent with our agile engagement.

• Dedicated transition webpage - we’re in the process of developing a proto-type webpage, which is dedicated to the transition process. You can find out more about this webpage. We’ll make this beta webpage available for you to review at the same time as the understand workshops (i.e. the week of 26th October). We’ll give you more detail about how this webpage review will work closer to the time.

Next steps

Key contacts and understand workshop attendees

Let us know who from your team will be:

• the key contact(s) for us in relation to the transition process; and
• participating on your behalf in the 'understand workshop'. If you have any questions about who should attend the 'understand workshops', please contact your Account Team in the first instance.

Action 1 > please confirm the names and contact email addresses of those key contacts and participants by email to 2022csa@chorus.co.nz by 21 October. 

 

Feedback on structure of the 2022 CSA

Our preference is to start with a blank page when drafting the 2022 CSA. Let us know whether you agree or would prefer that we use the existing contract terms as a starting point or start with a blank page.

Action 2 > please give us your feedback on structure by email to 2022csa@chorus.co.nz by 30 October.

 

Feedback on dedicated transition webpage

We’ve thought about how you might want to use a dedicated transition webpage to support your participation in this process and developed the proto-type accordingly. 

Action 3 > we want your feedback on the usability of the page by email to 2022csa@chorus.co.nz by 6 November.  We’ll use that feedback to finalise the functionality of webpage before launching it for use by 16 November.

 

Contact

For any queries, please contact Hannah Croft or Roxinne McCord at first instance.