The Government is getting its broadband policy in order and has done a good job of balancing the interests of everyone, information technology, telecommunications and consumer market intelligence provider IDC says.
The Government's telecommunications review document signalled a more direct role in setting the broadband prices New Zealanders paid, IDC New Zealand research manager Peter Wise said.
''Many look back and wish the Government had invested in better public transport during the sixties and seventies, but at the time, such investments were deemed unnecessary or too expensive.
''The Government is taking the equivalent of that investment step in fibre now and ensuring New Zealand is well set up to achieve the economic benefits and provide new services that advanced broadband enables,'' Mr Wise said.
The discussion document outlined the Government's proposed approach to reviewing the telecommunications regulatory environment, he said.
The review had been split into two stages, with the first addressing the issue of wholesale pricing in the market.
The review's second stage, set for some time in the future, would address fibre demand and migration challenges.
The Commerce Commission's announcement last December of a draft unbundled bitstream access (UBA) price of $8.93 exposed a ''gaping hole'' in the Government's broadband policy, Mr Wise said.
It would have resulted in lower wholesale prices for copper and potentially lower broadband and voice retail prices that could undermine the Government's investment in fibre.
''Our international research shows that relative pricing at a retail level is a major factor impacting [on] successful fibre uptake.''
Copper and fibre wholesale prices were similar and resulted in relatively similar retail prices, he said.
The commission's draft decision for pricing might have resulted in a wholesale price decrease of $12.53 per broadband line per month - wiping up to $160 million off the bottom line of Chorus and transferring that to retail companies such as Telecom, Vodafone and other players like Slingshot and Snap Internet.
''This may in turn have passed through to lower retail prices for end users but it also had the potential to wreck the fibre roll-out initiative.''
The Government's discussion document put forward a pricing structure that would result in a smaller discount to wholesale copper prices, down from the current $44.98 to a range of between $37.50 and $42.50.
That brought the prices into line with the basic introductory fibre wholesale price, Mr Wise said.
IDC senior analyst Glen Saunders said all retail service providers were likely to be faced with a more financially attractive solution than they had now and Chorus was faced with a much lower impact on its bottom line.
