Chorus goes to court over copper pricing

TOM PULLAR-STRECKER
Last updated 16:54, December 2 2013

Chorus will go to the courts to try to prevent the Commerce Commission slashing the price it can charge for copper broadband connections.

The company announced today that it would go to the High Court to argue that the competition watchdog applied the law incorrectly.

The commission ruled last month that the wholesale price 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 review" (FPP) 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.

"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.

The international benchmarking process the commission had used to come up with its existing determinations was "flawed", he said.

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

He expected the FPP reviews could take two years.

A precedent existed for prices that were finally arrived at to be backdated, he said.

"We are not looking to blame the commission, because it can only referee by the rules of the game as they are set," Ratcliffe said.

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"We recognise that the Commerce Commission has to operate within the regulations that are set in the Telecommunications Act. The commission's initial decision is a symptom of regulations that simply do not align with the Government's policy of a transition to fibre."

 - Stuff.co.nz

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