The Commerce Commission says there is limited competition in the wholesale broadband market and Telecom will continue to face regulation.
The commission has found Telecom's unbundled bitstream access service, which rivals can access to offer broadband services to users, dominates the market.
The commission says that dominance has been reinforced by Telecom's move to build cabinets between the exchange and house to speed up broadband.
Telecommunications Commissioner Ross Patterson says there is no effective competition for the more than 50 percent of end user lines served from cabinets.
Dr Patterson says the lack of competition also extends to the retail market.
He says Telecom's rivals cannot provide voice services over cabinetised lines using their equipment in exchanges, in conjunction with Telecom's unbundled bitstream access service.
