Support on financial issues relating to telecoms pricing determination

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Client New Zealand Commerce Commission
Dates 2015
Sector(s)Communications & Media
Service(s)Policy & Economics, Regulation & Competition, Review & Evaluation

The regulator and competition body in New Zealand required support on the cost of capital, in setting their final determination for the Unbundled Copper Local Loop (UCLL) and Unbundled Bitstream Access (UBA) pricing review in telecoms.

A CEPA employee undertook a nine week full-time secondment at the regulator looking at the cost of capital for the UCLL and UBA pricing determination.

Financial issues covered during the secondment included quantitative modelling of percentile choice, analysis regarding the interdependency between the risk-free rate and the MRP, and use of trailing averages versus prevailing rates. The CEPA employee presented to Commissioners, undertook research and contributed to the drafting of the Final Determination.
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