Broadband intervention 'simply astounding'

22:52, Sep 12 2013

Government moves to intervene in the price of broadband are "simply astounding" and if there is a problem with Chorus, New Zealanders should know about it, says Consumer NZ.

Communications Minister Amy Adams is facing a major attack on her plans to intervene in broadband pricing, with a campaign to "Axe the copper tax" heating up against Government plans to overrule a decision by the Commerce Commission.

Speaking on TVNZ's Breakfast, Consumer NZ chief executive Sue Chetwin said moves from the Government to allow Chorus to get a higher price for copper were mind-boggling.

"The Government most astoundingly said 'yes, we think we agree with Chorus', and despite the fact that they've negotiated a contract with them, have said they will interfere in the Commerce Commission's findings, and have actually set a higher price."

The new price would see taxpayers forkout an extra $600 million in tax on copper, which would be paid to Chorus.

Chetwin said while nothing had officially been set in stone, it was concerning that it seemed like there was no room to move.

Advertisement

"It is almost astounding now, that this move has happened. It is only a discussion document at the moment, but the discussion document doesn't allow for any of the Commerce Commission's findings to be a part of it.

"So we think that it's nearly a done deal, and we think that's wrong."

She said Chorus last year made $171 million in profit while paying out 25.5 cents to its shareholders.

"So if there's a problem with Chorus and we don't know about it, then we should know about it."

Prime Minister John Key disagreed however, saying the Commerce Commission got it wrong.

He said the methodology behind the Commerce Commission ruling was incorrect, because it had incorrectly interpreted the law.

Key said Chorus was not earning any money off the roll out of fibres for ultra fast broadband, and it was in New Zealand's best interests to make sure the company stays afloat.

The Dominion Post