Regulator pushes out copper line pricing deadline

Thursday 22nd May 2014

The Commerce Commission has pushed out a deadline to set the regulated price Chorus can charge to access services on its copper lines after accepting concerns raised by the retail companies.

The regulator is aiming to make a draft decision on the final pricing principle (FPP) for Chorus’s unbundled bitstream access and unbundled copper local loop services by December, when the telecommunications network operator is expected to adhere to the new regulated prices initially set by using international comparisons, with a view to make a final ruling by April 1 next year, it said in a statement. Separately, Chorus said it was disappointed with the delay, which meant the price set in the initial pricing principle would take effect from December.

"The telco retailers have all expressed serious concerns about their ability to engage effectively on the technical complexities of the FPPs if consultation were confined to the period after a draft determination," the commission said. "They have sought more rounds of consultation to allow them to assess and comment on the commission's assumptions in the FPP modelling."

The telecommunications network operator sought the FPP process after the regulator set the UBA monthly price at $34.44 per line, up from the $32.35 price initially mulled in its draft decision. That was composed of $10.92 for UBA, which facilitates internet services, and $23.52 for the UCLL, used for voice telephony. The UBA service allows internet retailers to use Chorus’s components on the copper lines without having to replicate them.

The longer consultation process comes as Chorus appeals a High Court judgment upholding the commission's determination. At the hearing earlier this year, Chorus claimed the regulator erred in law when setting the price Chorus can charge for access to its UBA services in that it didn't have any evidential basis to narrow its inquiry and ignored a section of the legislation aiming to support the government's goal of building a nationwide fibre network.

The commission rejected the claim, arguing that the change in regulation, rather than the decision, had shocked the market.

Chorus shares rose 2.3 percent to $1.75 yesterday, and have climbed 22 percent this year after being punished in 2013 during the height of the regulatory uncertainty.

BusinessDesk.co.nz

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