The Telecommunications Users Association says increased competition in backhaul links should result in cheaper internet access and better data caps in the long term.
Telecommunication companies use backhaul services to access transmission capacity from local and regional exchanges which enables them to provide communication services like voice and broadband.
The Commerce Commission's annual review of the backhaul service has found that it is subject to competition and no longer needs to be regulated, largely due to the separation of Telecom last year.
TUANZ chief executive Paul Brislen says the Commission's finding should mean telcos will increase the amount of data in broadband packages.
Mr Brislen says increased competition has started to translate to better deals for people in the last year.
"Orcon has launched an unlimited plan and Telecom's just redefined its plans.... It really shows the price of bandwidth for the ISPs and the telcos has dropped significantly over the last couple of years."