Chorus ready to start discussions

TOM PULLAR-STRECKER
Last updated 05:00 11/12/2013

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Chorus is open to talks with internet providers about how to handle the "fine mess" of copper broadband price regulation, chief executive Mark Ratcliffe says.

But he refused to say whether a previous proposal from major internet providers that Chorus be allowed to charge $37.50 a month for a copper phone line and broadband connection might be an acceptable part of any solution.

There was "an obsession around price" which was only part of the equation, he said. "I think there is a package of things that can deal to the needs of a multitude of stakeholders but it needs to be worked through."

Ratcliffe said he was encouraged by a suggestion from Finance Minister Bill English that the Government might take a fresh look at the way the Commerce Commission worked, but he assumed any reforms that flowed from that review would involve a law change. In the absence of a circuit-breaker, it was "looking increasingly likely the regulatory process will play out over multiple years", he said.

The Commerce Commission ordered Chorus cut the wholesale price of a copper phone line and broadband connection by 23 per cent, to $34.44 a month, from next December. But Chorus is making the competition watchdog review the ruling by modelling the costs of building a copper network, a process the commission advised on Friday had taken some overseas regulators "several years".

The commission also warned in a discussion paper that there was legal uncertainty over whether the reviewed prices would then need to be backdated to next December.

Internet providers Orcon and CallPlus, and the Telecommunications Users Association, signalled some appetite for discussions last week, amid concern that regulatory and legal uncertainties over copper pricing could drag on for many years. Orcon chief executive Greg McAlister said he believed talks were "quite possible", perhaps after Christmas.

Ratcliffe said Chorus was "not party to the May letter" and he did not believe it would be a "particularly useful starting point" for future talks. 

"We saw people who weren't part of those discussions get quite upset about the lack of transparency, so clearly transparency is important. What we want is certainty through a prolonged period of heavy investment.

"We'd need to have something that was going to endure and couldn't be undone by one person who didn't like the outcome, if they still had an avenue to overturn it. Everyone has got a slightly different perspective of what they are looking for, so you have got to spend a little bit of time working those things through."

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Ratcliffe believed the "right outcome" would come naturally if trust could be established. "The question is how we work this through in a way that stops all the politicking, accusations and blame that seems to go on."

Telecom, Vodafone, CallPlus, Orcon, Kordia, Snap Internet and Compass Communications wrote to Communications Minister Amy Adams in May, suggesting the Government fix the combined wholesale price of a copper phone line and broadband connection at $37.50 a month.

Ratcliffe said Chorus was "not party to the May letter" and he did not believe it would be a "particularly useful starting point" for future talks. He believed the "right outcome" would come naturally if trust could be established.

- BusinessDay

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