Significant milestone for development of fibre services regulation

A brief recap  

The consultation paper

• draw on existing disclosure requirements under UFB agreements, existing disclosure requirements under the Act, and requirements under Part 4 of the Commerce Act;
• have standardised spreadsheet disclosures, which could include regulatory asset values, financial performance (eg profitability), cost allocation, capital expenditure, and quality performance measures and statistics; and
• consider further report-based "special topic" disclosures, which could cover matters such as asset management plans, planned investment, prices and pricing methodologies, and stakeholder engagement. 

• explains how some matters will be established by IMs, so its focus in this process will be on matters covered by IMs that still require the Commission to exercise discretion, and matters not covered by the IMs at all;
• will therefore determine allowable revenue comprising building blocks revenue, pass-through costs and wash-ups by: 
  • applying the relevant IMs (eg asset values, cost allocation, WACC, tax, depreciation); or
  • where there is no relevant IM, or where some discretion under the IM is required to be exercised, by applying discretion in accordance with the statutory purposes (eg opex, capex forecasts, revenue smoothing to avoid price-shocks, wash-up mechanism).  An important aspect of this approach will be assessing information from Chorus that will be submitted under the capex IM and collecting information on opex so as to determine an "expenditure proposal"; and
• will develop a wash-up mechanism for over and under recovery under the revenue price path, as required by the Act.

Submissions open

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