On 27 March 2026, the Ministry for Regulation published its final Telecommunications Sector Regulatory Review report, delivering 22 recommendations to modernise, simplify and improve the proportionality of New Zealand's telecommunications regulations. If implemented, the reforms are estimated to deliver $35 million to $45 million in net benefits over the next decade.

This alert summarises the key findings, what the recommendations mean for business, and what happens next.

Who needs to read this alert and why

This alert is relevant for telecommunications network operators, retail service providers, infrastructure investors, and digital service providers operating in New Zealand. It will also interest in-house legal, regulatory and policy teams assessing how the proposed reforms may affect compliance obligations, market settings, and investment opportunities.

What happened

Telecommunications regulation was introduced in 2001 in a market where Telecom was a vertically integrated monopoly provider of telecommunications services over a copper network. In 2006, Telecom was functionally separated and the copper loop unbundled. In 2011, the transition from copper to fibre was accelerated by the Ultra-Fast Broadband (UFB) Initiative, which delivered fibre to the premises to 80% of New Zealand households and introduced the Local Fibre Companies. In 2017, building-block regulation was introduced for fibre networks, based on the regulation of electricity and gas networks, and a copper withdrawal process was introduced.

As this history shows, the telecommunications regulatory regime has been reviewed and substantially reformed every five to six years since its introduction, reflecting the fast pace of technological change - from copper to fibre in fixed-line services, the evolution of 3G to 5G in cellular technology, and the emergence of satellite providers like Starlink reshaping rural connectivity. The Review continues this tradition.

In June 2025, Regulation Minister David Seymour and Communications Minister Paul Goldsmith launched the Telecommunications Regulatory Review, conducted by the Ministry for Regulation in collaboration with MBIE and the Commerce Commission.

The Review involved targeted engagement with 19 providers and industry groups, followed by a public consultation that attracted 36 submissions from individuals, industry and consumer groups.

The final report was delivered to Ministers in early November 2025 and approved by Cabinet in February 2026. Where legislative change is required, this is generally expected to be progressed within six months of Cabinet's decision.

The Review’s findings

While parts of the regulatory system are working well, the Review identified structural issues across all five focus areas.

What is working well

• Practice by regulatory bodies: MBIE and the Commerce Commission are recognised for open and responsive engagement with industry.

• Price-quality regulations: Chorus considers the framework effective and well-administered. No changes are recommended.

• Dispute resolution: Recent improvements have increased consumer awareness and access.

• Fibre information disclosure: The Commerce Commission's process is transparent and consultative, with ongoing efforts to reduce regulatory burden.

Key issues

Access to telecommunications services

• The Telecommunications Service Obligations (TSOs) are increasingly inefficient, financially unsustainable, and out of step with contemporary consumer needs and available technologies.

• Phone booth rules are based on copper technology, discouraging modernisation to provide internet services.

• There has been no reported uptake of Anchor Services, but the rules may still serve a competitive function.

• There is overlap between Geographically Consistent Pricing and other price-quality rules.

Rules about fibre

• Overlapping regulatory tools - deeds, constitutions, and legislation - and split oversight create practical challenges.

• The fibre regulatory system remains procedurally rigid and burdensome.

• The sector has matured significantly, reducing the need for legacy rules.

Levy calculations

• The levy process is administratively complex, requiring bespoke financial reporting separate from standard accounts.

• Levy amounts are uncertain year to year, as each provider's liability depends on the revenue of all other liable providers.

• Compliance requirements, including external audit obligations, are disproportionate for smaller providers.

Rules that protect and inform consumers

• The Commerce Commission's guidelines benefit consumers and promote competition, but gaps in coverage and enforcement remain.

• Reliance on industry self-regulation through the Telecommunications Forum (TCF) limits the system's effectiveness. TCF codes do not apply to non-members, leaving growing numbers of consumers (particularly rural satellite users) unprotected.

• The Commerce Commission's code-making process does not require consideration of proportionality, risking regulatory action that is not tailored to risk.

Taking a proportionate regulatory approach

• The Commerce Commission's information requests can be resource intensive and sometimes lack a clear rationale.

The Review's recommendations

The 22 recommendations are organised around three themes:

• Modernisation: Outdated rules must be updated to keep pace with technological change;

• Simplification: Complex rules should be streamlined to ease compliance for businesses; and

• Proportionality: Regulatory action should match the scale, risk, and impact of specific issues.

Key recommendations include:

• phasing out the TSOs with targeted financial support for the transition to modern technologies;

• streamlining fibre regulation to remove duplication and procedural burden;

• reforming the levy model to simplify calculations and increase certainty for providers;

• shifting consumer protection from industry self-regulation to enforceable Commerce Commission codes; and 

• embedding proportionality and transparency in the Commerce Commission's regulatory practices, including information-gathering.

What’s next

The pathway forward is as follows:

• Cabinet direction: Cabinet approved the recommendations in February 2026. The Ministers for Regulation and for Media and Communications will determine which to progress and on what timeframe.

• Implementation: MBIE and the Commerce Commission will lead the policy and operational processes required to give effect to Cabinet's direction.

• Legislative change: Several recommendations require amendments to the Telecommunications Act 2001, which will need to be progressed through Parliament. Progressing legislative change of this nature in the next six months will be challenging and the timing and progress may be influenced by the outcome of the next general election.

• Commerce Commission actions: The Commission is recommended to review Anchor Services in 2026 and to develop a consumer protection code where removing the TCF's statutory role creates a regulatory gap. Notably, no Commission retail service quality codes have been made to date.

• Levy reform: MBIE is already reviewing parts of the levy system. The Review's levy recommendations will be progressed alongside that existing work.

• Report-back: The Review proposes that the Minister for Regulation report back to Cabinet in 2028 on implementation progress.

Businesses should monitor these processes closely, as they will directly affect regulatory obligations and commercial settings.

Our view

Unlike the transformative reforms of earlier years - the functional separation of Telecom in 2006, the structural separation of Chorus and introduction of the Ultra‑Fast Broadband Initiative in 2011, and the introduction of building-block regulation for fibre networks in 2017 - the Review does not recommend wholesale restructuring of the sector. The focus is instead on fine-tuning and simplification, removing regulation that is no longer justified.

Fibre regulation: Relief for LFCs

The fibre recommendations address longstanding frustrations of Local Fibre Companies (LFCs) whose regulatory obligations remain embedded in their constitutions, subject to Government Share restrictions, as a legacy of the UFB Initiative. Moving wholesale-only restrictions into legislation, removing the Government Share, and streamlining exemption and deregulation processes should reduce compliance costs and provide greater clarity and certainty for LFCs and investors.

The repeal of Layer 1 unbundling requirements is welcome. Unlike copper unbundling, fibre unbundling was never commercially viable. LFCs were required, at considerable cost, to build their networks to enable physical unbundling that no provider has taken up; the report estimates a saving of approximately $4 million over ten years from removing this requirement. Retail providers oppose the change on the basis that it removes a safeguard against wholesale market power, but the economics of physical point-to-multipoint unbundling do not support retention. 

Consumer protection: A step in the wrong direction?

The recommendation to shift consumer protection from TCF self-regulation to enforceable Commerce Commission codes sits uneasily with the Review's overarching deregulatory theme. Industry participants have invested significantly in the TCF framework, and the proposal to replace it with a Commission-led regime represents a material increase in regulatory intervention at a time when the Review is otherwise seeking to reduce it. Cabinet appears to have recognised this tension: its direction is understood to depart materially from the Ministry for Regulation's recommendation, suggesting a significantly more cautious approach to displacing the existing self-regulatory model.

The Review's concerns are not without foundation. TCF codes do not bind non-members - leaving growing numbers of consumers, particularly rural satellite users, unprotected - and there is a fair question whether TCF self-regulation in areas such as marketing has been sufficiently effective in practice. However, the appropriate response is not necessarily to abandon self-regulation in favour of Commission-led codes. A useful comparison is the Banking Ombudsman Scheme, which operates under the Financial Markets Conduct Act 2013 as an industry-funded, self-regulatory dispute resolution model - but with one critical difference: membership of a dispute resolution scheme is compulsory for all registered financial service providers. The gap the Review identifies in the telecommunications sector is not a failure of self-regulation as a model, but a failure to require participation in it. Addressing the coverage and effectiveness gaps by making TCF membership compulsory and strengthening the codes themselves, rather than by transferring regulatory authority to the Commission, would be more consistent with the Review's broader objectives.

Levy reform: Significant simplification

The levy recommendations are among the most immediately impactful reforms for providers. The current "qualified revenue" calculation is complex and, because each provider's liability depends on the revenue of all other liable providers, impossible to quantify in advance. Setting the levy as a fixed percentage of revenue will, for the first time, give providers certainty on the quantum of their obligations.

Raising the threshold from $10 million to $50 million will remove smaller providers from the levy regime entirely. Removing the external audit requirement is estimated to save approximately $5 million across the sector over ten years. 

How we can help

We have deep expertise in telecommunications regulation, competition and consumer law, infrastructure investment, and regulatory reform. We can help you:

• assess the impact of the proposed reforms on your operations and compliance frameworks;

• prepare submissions on proposed legislative amendments as they are progressed through Parliament;

• develop or update regulatory compliance programmes to reflect the new regime;

• advise on the implications of levy reform, consumer protection code changes, and fibre regulatory restructuring; and

• structure transactions and investments to manage regulatory risk during the transition period.

If you have questions about what these reforms mean for your business, please contact one of our key contacts below.

Speak with one of our experts.