NetSafe says about 75 adults report harassment and speech abuse on the internet to it each month, with abuse including fake online profiles and falsely soliciting sexual partners on swingers dating sites.
The internet watchdog strongly supports the establishment of a tribunal, or commissioner, to address cyber-bullying in a submission to the Law Commission.
The commission wants new laws to combat cyber-bullying, making it an offence to incite suicide, maliciously impersonate another person or publishing intimate photos without consent.
NetSafe recommends a pre-tribunal triaging process to resolve many situations before progression to a tribunal, or commissioner, and it wants the education sector to be integrated into the model.
Justice Minister Judith Collins has said she is treating the issue as a priority, while secondary school principals have said they want the power to search students' cellphones and laptops.
NetSafe says research it conducted with the University of Auckland found a third of secondary school students reported at least one experience of electronic harassment in the past year.
"In total 17.2 per cent of secondary students reported distressing electronic harassment, making this the most distressing online challenge by volume for New Zealand young people," NetSafe said.
It says that the majority of adult targets of harassment and speech abuse online it hears from have been threatened with physical harm. Others have had sensitive private information published.
Victims feel the internet is like a "wild west, a lawless space where justice and ethics are not recognised or enforced".
Legal interventions are currently informal and ad hoc and involve police officers contacting alleged offenders. Redress for speech abuses not covered by criminal statutes are nearly non-existent because many people cannot afford to take civil proceedings.
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