Consumer groups reject Chorus' approach

TOM PULLAR-STRECKER
Last updated 17:22 03/03/2014

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Three consumer and lobby groups have rejected Chorus' approach to a crucial review of wholesale copper phone-line pricing.

Consumer New Zealand, InternetNZ and the Telecommunications Users Association (Tuanz) said Chorus' own advisers should not be allowed to model Chorus' costs in providing its copper network. That would create a conflict of interest.

The price Chorus can charge for a copper phoneline and broadband connection will fall from $44.98 a month to $34.44 from December, pending the result of two reviews being conducted by the Commerce Commission and a High Court challenge from Chorus.

The reviews could result in different pricing which might be backdated to this December, if either take longer than that to complete.

InternetNZ, Tuanz and Consumer NZ said in statement that they had made a joint submission to the commission, urging it not to rush the copper line pricing review, which is the more complex and important of the two reviews.

"There are serious problems with the suggestion by Chorus that its own professional advisers do the initial modelling process for the [review]," InternetNZ chief executive Jordan Carter said.

"The public interest in fair pricing for broadband is at risk if the regulated party designs its own cost model."

Chorus spokesman Ian Bonnar said adviser Analysys Mason would carry out the modelling under its proposal, but the commission would "decide on all key parameters and specifications".

That process was provided for under the Telecommunications Act, he said.

"The commission [can] issue binding requirements for the modelling. This allows the commission to address any concerns about 'capture' or information advantage that might ordinarily attach to a cost model built by a regulated supplier." 

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- The Dominion Post

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