Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.

Grumpy Chorus investors warm to Commerce Commission UBA move
Posted on 10-Feb-2014 08:03 by Bill Bennett. | Tags Filed under: News.



On Friday after the Commerce Commission outlined the proposed process for pricing Chorus’ unbundled bitstream access (UBA) – the wholesale broadband service the company sells to retail service providers.

The process will fix a price according to the ‘Final Pricing Principle’. That’s officialdom’s way of describing using a full economic model to determine the price.

At present the Commerce Commission’s regulated price is based on benchmarking against other countries with similar services. Using this model the Commission set the UBA price at $10.92 – almost half the current price of $21.46.

Chorus argues that process is flawed as there are few similar cases to benchmark against. And anyway, benchmarking came up with the ruling that Chorus needs to sharply cut the UBA access price – the decision that caused all the recent fuss about the company’s finances and its ability to bring in the government-sponsored Ultrafast Broadband project on time.

In November Chorus applied to the Commerce Commission to move to the Final Pricing Principle.

One reason this option wasn’t taken earlier is the process can be lengthy. These things can move at a glacial pace. When Chorus triggered the process it warned the investigations could take two years. Read that as two more years of uncertainty for the broadband industry.

In Friday’s announcement the Commerce Commission set the deadline for the work to be completed by December 1. That’s the day the new price is due to take effect.

There’s no guarantee the Final Pricing Principle will come up with a higher regulated price. However, Chorus is confident that full economic model used by the Commerce Commission will come up with something considerably higher than the $10.92 figure reached through benchmarking. It has plenty of knowledge about where the investigation will go.  The Commission says it will Chorus’ experience delivering broadband on the copper network – and in some cases on the Rural Broadband Initiative network to help determine the price.

The company’s investors appear to agree with Chorus’s assessment. When the sharemarket closed on Friday Chorus’ price was eight percent higher. That’s the first good news Chorus investors have had in months.

[digitl 2014]

digitl on Google+

The post Grumpy Chorus investors warm to Commerce Commission UBA move appeared first on digitl.



comments powered by Disqus


Trending now »

Hot discussions in our forums right now:

Netflix officialy launching in NZ in March
Created by jarj, last reply by tdgeek on 21-Nov-2014 19:08 (97 replies)
Pages... 5 6 7


Gull Employment Dispute.
Created by networkn, last reply by Athlonite on 23-Nov-2014 10:46 (62 replies)
Pages... 3 4 5


Which one is right for me? M8, Z3, S5 or other?
Created by makiomoto, last reply by makiomoto on 20-Nov-2014 13:52 (40 replies)
Pages... 2 3


Slingshot line speed
Created by Frankiej45, last reply by Frankiej45 on 20-Nov-2014 14:38 (14 replies)

Chief Censor - He's at it again!
Created by scuwp, last reply by Nebbie on 19-Nov-2014 16:23 (42 replies)
Pages... 2 3


Little Wins labour Leadership
Created by MikeAqua, last reply by Aredwood on 21-Nov-2014 18:47 (53 replies)
Pages... 2 3 4


Orcon: Why did you cancel my email account without telling me??
Created by old3eyes, last reply by old3eyes on 21-Nov-2014 17:03 (13 replies)

Council recycling.....
Created by xpd, last reply by richms on 19-Nov-2014 17:17 (27 replies)
Pages... 2