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2 Statement of the Issues

2.1 The state of telecommunications in New Zealand

Telecommunications has been the subject of a recent government stocktake and the following section draws heavily on reports prepared for it.3

The main telecommunications technologies currently available in New Zealand are:

  • conventional landline (public switched telephone network): generally based on copper cable, but being progressively replaced by fibre-optic cable with greater capacity; a process that may require upgrading and perhaps relocating existing roadside cabinets

  • cellular networks (mobile phones)

  • wireless local loops (eg, WiMax), are emergent systems that provide local access network through establishment of local cell sites.

A combination of changing technologies and service possibilities, and commercial considerations are driving the principal trends and influences on these networks.  These include the search for ‘Next Generation Networks’ capable of supporting new services, convergence in technological capabilities between fixed-line and mobile services, voice services and data transmission; convergence of devices to handle phone and other consumer electronic functions, and convergence between telecommunications and media, with transmission of broadcast content over phone connections.

These influences combine to give telecommunications operators a strong incentive for increasing their network capacities to handle more data at speeds that support the increased range of services.  Other commercial considerations include:

  • declining revenue from fixed-line voice services in low traffic density areas due to substitution by mobile telephony and voice over internet protocol services

  • uncertainty over regulation (eg, unbundling)

  • uncertainty over the value of content-based services.

There appear to be therefore a number of current influences that point to imminent upgrade of facilities, including fibre-to-home and fibre-to-node upgrades of the local loop and development of wireless local loops, and replacement of large exchanges with local control cabinets.  All imply moving electronic control systems closer to the customer and, given current technologies, hence more roadside cabinets and associated works.  The use of road reserves for siting telecommunications cabinets and antennas is seen as critical by the telecommunications industry: this is both for increasing coverage of wireless telecommunications and for improving the quality of landline services such as new and improved fibre-optic networks.  This in turn will lead to increased competition amongst suppliers and provide greater choice and potentially cheaper services to consumers.

2.2 Controls over telecommunications facilities

Two statutory documents govern the establishment of telecommunications facilities within New Zealand – the Resource Management Act 1991 and the Telecommunications Act 2001.  The current obligations and requirements of each Act are discussed below.

2.2.1 Resource Management Act

The establishment of telecommunications facilities within road reserves is subject to the controls provided by the Resource Management Act 1991 (RMA).  The RMA allows territorial authorities to implement rules within their district plans for controlling the environmental effects of telecommunications facilities.  To this end, district plans often contain rules to control the location, size and appearance of telecommunications facilities; and also radio-frequency fields and noise emissions from telecommunications facilities.

The decision-making power for network utility infrastructure was devolved to territorial local authorities when the RMA came into force in 1991.  While the environmental effects of telecommunications infrastructure are likely to be the same or similar throughout the country, the policies and rules in district plans that have evolved in response to address the new responsibilities lack consistency.  Currently each territorial authority provides its own set of district plan provisions by which to address the potential impacts of telecommunications facilities in road reserves.  As a land-use activity, each district plan will state that telecommunications facilities of varying heights and configurations are either permitted within the thresholds specified by the plan, or that some form of approval is required through a resource consent process.

There can be marked variances between the provisions of each district plan, particularly with regard to provisions relating to radio-frequency fields and the permitted height of masts and antennas.  Such inconsistencies can add costs to installations in various ways, by creating uncertainty for territorial authorities and telecommunications operators.  Local authorities face uncertainty when proposed activities do not clearly fit under the current plan provisions and there is no precedent to draw from.  In this case, the appropriate level of public consultation and the outcome of proposed facilities will depend on planners’ interpretation of the district plan, creating some uncertainty for telecommunications operators as well.  Operators can also lose economies of scale if districts have different requirements for facility size and design.  They face additional compliance cost from identifying and adhering to different councils’ requirements.

It should be noted that the RMA also provides for Telecom, Vodafone, Broadcast Communications Ltd and Clear Communications Ltd (who currently are the only telecommunications providers with status as a requiring authority) to have land designated for their operational purposes.  To date this option has not been taken up by these parties for sites within road reserves.  Adopting a national policy statement has not been proposed as a practical option by the telecommunications providers, as it would not provide increased consistency nor certainty beyond that currently experienced through compliance with individual district plan provisions.

However, there is inevitably a trade-off between:

a) the ease of infrastructure investment through minimal planning ‘inconsistency’ and the contribution this can make to initiatives, including the government’s Economic Transformation Agenda and the Digital Strategy, and

b) the local community-driven standards and values expressed through district planning processes (the principles of the RMA).

2.2.2 Telecommunications Act

The Telecommunications Act 2001 provides telecommunications operators with a statutory right to occupy the road under agreement with the road controlling authority (as the landowner), “subject to reasonable conditions” regarding size and positioning of the facilities so as not to impede use of the road.  This agreement process undertaken under the Telecommunications Act runs in parallel with the RMA process.  The road controlling authority in most instances is the local territorial authority, but it can also be Transit NZ and the Department of Conservation (DOC), depending on the location of the proposed telecommunications facility.

Under the provisions of the Telecommunications Act, telecommunications operators and the road controlling authorities reach what are essentially property agreements for occupation.  These are subject to reasonable conditions which are primarily aimed at ensuring the safe and efficient flow of traffic and pedestrians within road reserves, ensuring that access is maintained, ensuring co-ordination with other works that may occur in the road, providing for reinstatement works, etc.

The scope and type of conditions imposed by road controlling authorities can vary widely throughout the country, as can the level of payment requested by the road controlling authorities.  Although section 153 of the Telecommunications Act specifically prohibits local authorities from charging rental for any telecommunications 'line or works' in the road corridor, some local authorities have assumed the power to charge for non-traditional facilities like wireless aerials and dishes, and they are also able to collect rates revenue from utility networks.  Such inconsistent outcomes create uncertainty for the telecommunications providers over whether they will achieve a satisfactory agreement with the road controlling authority to occupy land within road reserves.

A peculiarity of the Telecommunications Act makes it distinct from other legislation giving utilities rights to access for facilities in the road corridor: the term ‘road’ is defined broadly to include any public open space, which includes parks and reserves as well as legally defined roads.  A review of legislation governing utilities in the road corridor, led by the Ministry of Economic Development, considered narrowing this definition to be consistent with that applying to gas and electricity facilities, but such a change has not yet been recommended.

The review did recommend:

  • aligning definitions of reasonable conditions for all utilities with those in the Telecommunications Act

  • a code of conduct be developed by utilities operators and councils

  • suggested changes in legislation so conditions cannot be used to improve the amenity of an area (eg, by requiring overhead wires be relocated underground), but only to restore area road subject to utility works, to the condition as identified in the Long Term Council Community Plan.

The final point should ease disputes and delays over the appropriate standard to which the road corridor should be restored following work on utilities facilities.

2.2.3 Other legislation

When considering applications for facilities in road reserves, Transit NZ also has the ability to impose reasonable conditions under a combination of the Transit NZ Act and the Telecommunications Act.  As a potential road controlling authority, DOC does not consider applications under the Telecommunications Act; instead, DOC assesses them through its concessions process, whereby all activities must be shown to be consistent with the intentions of the relevant Conservation Management Plan.  Matters considered through the concessions process often differ significantly from those considered under the Telecommunications Act: they tend to focus more on the potential environmental impacts of proposed facilities rather than the safety concerns considered by Transit NZ and territorial authorities.

2.3 How non-standard planning provisions affect industry

Variable RMA provisions for telecommunications facilities can affect the resource use efficiency of the networks in a number of ways:

  • Companies incur costs that consume labour and materials for no saleable output in the preparation and processing of applications for consents, in delays in authorisation of work and in uncertainty as to outcome.

  • Inconsistent approaches in different districts may reduce the realisation of economies of scale through use of standardised equipment.

  • Such impacts on operational costs of the networks are either passed on to and recovered from the network’s customers, or met by reduction in profits and shareholder returns – slowing down the rate of new investment.

  • Configuration of the networks may be redirected from its otherwise optimal route by the stringency of some local provisions, resulting in increased inefficiencies and risks to the on-going network operation.

  • There is potential for delays in rolling out new services, as resources used in additional compliance activity are diverted from new investment (regulatory compliance crowding out investment expenditure).

  • The current situation is compounded for new-entrant operators, who have no existing network to build on and are particularly dependent on rapid deployment of new facilities to provide viable services and competition against incumbent operators.

In short, variable planning provisions both reduce the level of investment and delays any investment occurring.  A local authority approach to works on telecommunications infrastructure that would make them permitted activities (subject to specific limitations) can reduce both impediments.

2.4 Summary

Telecommunications facilities are currently subject to resource management consenting processes that differ widely between the 73 territorial and unitary local authorities in New Zealand.  Infrastructure will require planning approval in one district, where in an adjoining district the same infrastructure may not require resource consent at all.  A lack of national consistency in the rules of district plans is leading to uncertainty and inconsistencies around time, costs and outcome of the RMA process.  This in turn is seen as impeding the delivery of new and improved services that limit the availability, choice of services, and cost savings to consumers.

There is a significant challenge in achieving a balance between facilitating investments in telecommunications infrastructure and protecting those values identified by communities as important.

3 Azimuth Consulting Limited 2006 and Network Strategies Limited 2006.