Telecom is backing the government's controversial intervention into broadband pricing, questioning why industry rivals seem intent on a court battle.
A discussion document from Communication Minister Amy Adams proposing the Government sets the price which network company Chorus can charge broadband retailers to access its copper-based network, faces a well-organised attack from the Coalition for Fair Internet Pricing.
The coalition, along with companies such as Vodafone, say the government should abandon its intervention. Instead, the Commerce Commission, which in a draft decision recommended Chorus' charge be cut by 25 per cent, should be allowed to complete its process.
Adams' proposals would see a small cut in charges to retailers, but would avoid an almost inevitable court challenge of the commission's final decision.
The charges being debated cover the period during which Chorus builds the state-subsidised ultra fast broadband (UFB) network.
Simon Moutter, Telecom's chief executive, said the "bold and relatively unique" UFB project would be impossible without state intervention.
"You are trying to overcome very, very challenging economics, and without the government in behind it, it wouldn't be happening,'' he said.
"In our view that validates, within reasonable bounds, some policy to ensure that the programme is successful."
Moutter said the proposals of the government provided for good outcomes for customers by ensuring the UFB project was rolled out on time, while providing certainty for the industry.
A group of broadband retailers, including Telecom and Vodafone, wrote to Adams in May proposing a compromise position aligning the copper wholesale broadband price with the basic fibre product price. Adams' proposals have the industry proposal as the lower end of a range of prices.
Vodafone has since attacked the government, calling its intervention a "copper tax" on consumers. It claims that the compromise on price was prefaced on a fundamental need to increase the speed of the basic fibre broadband prices being offered in order to differentiate it from copper products.
Telecom's submission on Adams' discussion document restates its belief that fibre needs to be faster than the current speeds proposed, broadly backs her recommendations.
Moutter questioned the approach of Vodafone.
"What happened to the over-arching objective to have investment certainty, that the biggest prize here, for all of us in the industry, is a certain outcome, that moves and sets the price soon, not years down the track?"
The certainty of price was more important than the price itself, allowing "major investment decisions" to be made without the threat of a "regulatory rug pull", he said.
"I do not understand how the parties taking this line think it's going to get a certain outcome. It feels they're all off headed to prosecutor legal process, and an endless ComCom [Commerce Commission] debate that's going to go on for years, and we all have no idea what the outcome looks like."
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