New Zealand’s Commerce Commission is planning to study Internet Overcharging schemes from Internet Service Providers as part of a review of the government’s planned investment of $1.35NZD billion to construct a state-subsidized fiber broadband network.

At issue is whether the government’s investment in broadband will not deliver value for money if broadband providers sell heavily usage-capped broadband services over the country’s new network.

The Commerce Commission serves as New Zealand’s antitrust regulator, charged with finding marketplace abuses and correcting them, especially in the absence of competition.  Included in the wide-ranging review:

• Network peering: Allowing broadband traffic to flow freely between Internet Service Providers without interference or punitive expense;
• Data caps: Whether ISPs will continue to limit broadband usage on a network paid for by public funds, pocketing the proceeds;
• Net Neutrality: Ensuring that content over the network is treated fairly and equally.

“Our aim is to promote competition in telecommunications markets for the long-term benefit of end-users of telecommunications services in New Zealand,” Telecommunications Commissioner Ross Patterson said in a statement. “The study will result in a report which will identify any factors which may inhibit the uptake of ultra-fast broadband services.”

Most of the investigation will likely target New Zealand’s dominant phone company – Telecom New Zealand.  The former state-owned monopoly has rebuilt part of its market dominance pitching broadband service across the country over its landline-based DSL network, by which most New Zealanders obtain broadband.  While the company competes with other providers who resell service over Telecom phone lines, many critics charge the phone company position as the owner of the infrastructure gives it a powerful position in the market.

The New Zealand government hopes to retire its aging copper-wire telephone network and replace it with a combination of fiber optics in cities and towns and fixed wireless service in rural areas.  A discussion paper is expected from the commission by June, with a final report due in December.