Targeted proposals aim to preserve regulatory certainty to promote further network investment without putting consumer or economic benefits at risk
Regulation needs to remain fit for purpose as the market evolves
On 17 March 2026, the Commerce Commission (ComCom) unveiled proposals for “targeted improvements” to the rules governing fibre networks in New Zealand, with the aim of ensuring that they support continued investment while protecting price and quality for consumers. The draft decision forms part of ComCom’s first review of the fibre Input Methodologies (IMs), which set the regulatory framework for fibre services under Part 6 of the Telecommunications Act. They establish how assets are valued, how prices and revenues are determined, and how the cost of capital is calculated, providing regulatory certainty for operators to invest efficiently in the network. According to Tristan Gilbertson (Telecommunications Commissioner, ComCom), the review is about ensuring the regulatory framework keeps pace with a rapidly evolving telecoms market, thereby supporting ongoing investment in “world-class” fibre networks and services that are critical to New Zealand’s digital economy.
ComCom must complete its review by October 2027
Over the past five years, ComCom has established a new regulatory framework for fibre services as well as introduced a number of consumer protection and monitoring initiatives. However, it is required to review the fibre IMs within seven years of their publication – and to complete the process by October 2027. As such, in March 2025, ComCom launched the 2027 Fibre Input Methodologies Review via two Notices of Intention and an Open letter seeking stakeholder views on the process and initial focus areas. Here, the regulator signalled that for operators that share common fibre cost of capital IMs, issues it would be considering would include its approach to the cost of debt, the risk-free rate of interest for equity and the tax-adjusted market risk premium.
The current framework is broadly working well, with only targeted changes required
In ComCom’s initial view, the fibre IMs are generally working well and an in-depth bottom-up review is not required. Its review therefore focuses on the areas of highest value to end users of fibre services, prioritising targeted improvements. One of the key proposals in the draft decision is the introduction of a clearer investment test for large fibre network expansion projects, which would be assessed using a cost-benefit framework, including analysis of the value consumers place on fibre services through measures such as willingness to pay. By setting out the framework upfront, ComCom stated that it is seeking to reduce uncertainty and help ensure Chorus can invest in expanding the fibre network where there is a sound commercial case and clear benefits for consumers. The draft decision also proposes changes to improve the capex proposal process, including clearer information requirements and adjustments to regulatory timelines, which are intended to simplify and streamline the framework while making it more predictable for stakeholders. Other proposed changes include refinements to the treatment of connection capex and insurance.
The outcomes of ComCom’s decisions will contribute to determining the future regulation of Chorus
The fibre IMs review is being conducted in two stages. The draft decision in question covers issues relevant to the next fibre “price-quality reset”, which will determine Chorus’s revenues and service standards for the regulatory period that will apply from 2029. Stakeholder submissions on ComCom’s proposals can be made until 16 April 2026, with cross-submissions due by 6 May 2026 – although there will be further opportunities for interested parties to provide their views over the course of the review. Other issues, including fibre-specific cost of capital parameters, will be considered in the second stage of the review. ComCom is currently consulting separately on cost of capital input methodologies that apply across fibre and other regulated infrastructure sectors.
