The Government had proposed an eight-and-a-half-year regulatory holiday for UFB prices.
The holiday would be replaced with measures that would apply if the Commerce Commission regulated prices lower than those contracted, Mr Joyce said yesterday.
The regulatory holiday was strongly criticised in some quarters. Mr Joyce said he had listened carefully to industry concerns.
"While I think their concerns are more theoretical than real, given that pretty much everybody has been happy with the very competitive prices announced by CFH [Crown Fibre Holdings] to date, we have been able to find an alternative solution which will give the infrastructure builders confidence to stay committed to their low-capped prices, and customers' confidence that they will continue to get the best prices over that eight-and-a-half-year period."
However, Labour IT spokeswoman Clare Curran said the compromise forced on Mr Joyce by the Maori Party was even worse: "The Government's much-vaunted broadband scheme is in tatters. Steven Joyce has been forced into a hugely embarrassing back-down.
"If that wasn't bad enough, it now appears that the compromise solution demanded by the Maori Party in return for its support could be worse than the original proposed."
The only good thing about yesterday's announcement was it took away the secrecy of price setting for the UFB and made it more transparent, she said.
The compromise allowed the Commerce Commission to regulate pricing on fibre. But if the commission believed prices should go lower at some point, the Government should bear the risk, not the consumer, Mr Joyce said. It was Mr Joyce who got to make the decision on whether to regulate.
It also needed to be asked what the Maori Party was receiving in return for its support, Ms Curran said.
Mr Joyce said investors' contractual mechanisms would be triggered if significant changes were made to price or other key features of the UFB regime over the build period.
"Any such remedies would remain within the current Government funding of $1.35 billion.
They could be in the form of additional deferred repayment to the Government of the funding.
These remedies are similar to those provided in other public-private partnerships.
"In making this change the Government is backing the prices negotiated by CFH."
The measures would not apply where there was behaviour by local fibre companies which resulted in regulatory change, he said.
Mr Joyce said the changes would be introduced at the final legislative stages of the UFB Bill.
The changes were welcomed by NZICT, the group that represents the high-tech industry Chief executive officer Brett O'Riley said it was a significant change and addressed some of the concerns raised by NZICT and others about the proposed regulatory environment.
"It was always going to be tricky trying to balance the investment return requirements of the local fibre company investors and operators, with the need to give end customers confidence that they would not be price-gouged over time." InternetNZ welcomed the dumping of the regulatory holiday.
"The regulatory holiday proposed by the Government was one of the biggest flaws in the emerging regulatory framework for telecommunications," InternetNZ chief executive Vikram Kumar said.
"The mechanism proposed looks like a superior approach, even to the special-access-undertakings regime we suggested to the select committee. It does not require a major rewrite of the Telecommunications Act, and it can be implemented quickly" he said.
Telecommunications Users Association of New Zealand chief executive Paul Brislen was also happy.
"We, the consumers, get full Commerce Commission oversight of the new regime to make sure we're getting the best bang for our buck," he said.
