Review of broadband pricing to continue

Internet New Zealand and the Labour Party have praised the Commerce Commission for pressing ahead with a review of wholesale copper broadband pricing, though lower prices for consumers are far from certain.

In a draft report in December, the commission proposed reducing the wholesale price Chorus could charge internet providers for copper broadband connections, from December 2014, by about $12 a month. But the Government stepped in two months later when Communications Minister Amy Adams ordered a wider review of telecommunications regulation.

The wider review, which is due to be completed this year and lead to law changes next year, could trump any price drops ordered by the commission.

Internet NZ spokeswoman Susan Chalmers said the price the commission determined as fair could still be an "important benchmark".

Labour Party MP Clare Curran said the Government should cancel its review "and let the Commerce Commission and the industry deliver what Kiwis want - lower broadband prices".

The Government is understood to have ordered the wider review because it was concerned lower wholesale copper broadband pricing could leave Chorus short of cash to build the alternative government-backed fibre-optic ultrafast broadband network and could also undermine consumer demand for UFB. Adams said the Government would release a discussion paper on its review "in the next few months".

The commission's decision to proceed with its own pricing review was reached independently, she said.

"The commission's review of [wholesale copper broadband] prices is being carried out based on the existing regulatory framework and pricing principles. One of the questions for the [government] review is whether that framework and the current pricing principles need amendment."

The Dominion Post