Chorus to sing blues in court

20:20, Dec 02 2013

Chorus will go to the High Court in a last-ditch effort to prevent regulators from halving the price it can charge for copper broadband connections.

In another day of drama in the telcosector, Chorus' shares fell another 8.5 cents to $1.44, and the besieged firm was forced to defend its decision to fly 200 Wellington staff to Auckland for a get-together yesterday. Its shares have now fallen 50 per cent in the last year.

Chorus and Prime Minister John Key appeared equivocal on the key issue troubling policymakers; whether the firm would be able to complete its ultrafast broadband contract with the Crown because of the drop in copper pricing, without government assistance. Chorus spokesman Ian Bonnar said the answer was "not a simple yes or no".

Key said on radio that Chorus would "not have any surplus cash, in fact less than that" because of the Commerce Commission ruling on copper pricing.

Key appeared to rule out delaying the UFB project, saying the nation could not afford that. New Zealand would be "held back relative to other countries", if the network was not built on time, he said.

"We are going to make it happen come hell or high water."


Chorus said it would go to the High Court to argue that the Commerce Commission applied the law incorrectly when it ruled last month that the monthly wholesale price of copper broadband connections should drop from $21.46 to $10.92 from December next year.

The company also applied, as expected, for the commission to carry out a "full pricing principle" (FPP) review" of the copper broadband price. It has already asked for a similar review of the price it should be allowed to charge for copper phone lines, which has been set by the commission at $23.52 a month.

"The decisions to apply for an FPP and file for a High Court appeal have not been taken lightly by Chorus' board and management," chief executive Mark Ratcliffe said. But he said the international-benchmarking process the commission had used to come up with its existing determinations were "flawed".

"We have a duty to our shareholders to ensure we explore every option before us, including the High Court appeal," he said.

A spokesman for the Coalition for Fair Internet Pricing, David Cormack, said it had no position on the legal challenge, which he said Chorus was free to pursue.

The coalition was set up to oppose a law change - now abandoned by the Government - that would have reduced the size of price cuts ordered by the Commerce Commission.

Telecommunications Users' Association chief executive Paul Brislen gave some tacit support to Chorus after it was criticised for flying staff to a get-together yesterday while crying poor to the Government. While the timing of the staff gathering was "less than ideal", Chorus did not have a reputation for excessive spending, he said.

Bonnar said the annual event was not a party, but to talk staff through the firm's strategy. The flights had been booked months ago at a low cost. Fairfax NZ

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