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Telecommunications Act 2001

Fibre fixed line access services - General

165: Meaning and application of claw-back

You could also call this:

"What 'claw-back' means and how it affects internet prices"

Illustration for Telecommunications Act 2001

When the Commission talks about claw-back, it means they can do two things. They can make a fibre service provider lower its prices for a little while, so customers get some money back if they paid too much before. The Commission must make sure the price drop happens slowly, so the fibre service provider does not struggle financially. If the fibre service provider did not make enough money from its old prices, the Commission can let it recover some of that lost money. The Commission must make the fibre service provider recover the money slowly, so customers are not shocked by big price changes. You can find more information about this by looking at the Telecommunications Act and the Telecommunications (New Regulatory Framework) Amendment Act 2018.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS131953.

Topics:
Money and consumer rights > Consumer protectionBusiness > Industry rules
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164: Interpretation, or

"What special words mean in the Telecommunications Act 2001."

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"What the Commission and Minister must think about when making decisions about internet services"

Part 6Fibre fixed line access services
General

165Meaning and application of claw-back

  1. A reference to the Commission applying claw-back is a reference to the Commission doing either of the following:

  2. requiring a regulated fibre service provider to lower its prices on a temporary basis in order to allow end-users to be compensated for some or all of any over-recovery that occurred under the prices previously charged by the regulated fibre service provider:
    1. allowing a regulated fibre service provider to recover some or all of any shortfall in its revenues that occurred under the prices previously charged by the regulated fibre service provider.

      1. If the Commission requires a regulated fibre service provider to lower its prices, it must also require that the lowering of prices must be spread over time in order to minimise undue financial hardship to the regulated fibre service provider.

      2. If the Commission allows a regulated fibre service provider to recover any shortfall, it must require that any recovery must be spread over time in order to minimise price shocks to end-users.

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      Notes
      • Section 165: inserted, on , by section 24 of the Telecommunications (New Regulatory Framework) Amendment Act 2018 (2018 No 48).