Join us in Wellington 4th December and Auckland 27th November
Want to help us test an ads-free Geekzone? Register for webpass now

Geekzone: technology news, blogs, forums
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:

A 17 second violation of airspace? Is Turkey nuts?
Created by DaveB, last reply by xlinknz on 27-Nov-2015 16:32 (79 replies)
Pages... 4 5 6

When should you put up your Xmas tree?
Created by Finch, last reply by jonathan18 on 30-Nov-2015 08:46 (37 replies)
Pages... 2 3

Ford Eco Sport Titanium-Looking to buy
Created by psychrn, last reply by gzt on 28-Nov-2015 14:08 (37 replies)
Pages... 2 3

Huawei and 2degrees Nexus 6P 64/128 GB offer for Geekzone users
Created by freitasm, last reply by droopanu on 27-Nov-2015 15:58 (679 replies)
Pages... 44 45 46

Wireless broadband in Wellington?
Created by zhzh, last reply by zhzh on 28-Nov-2015 20:08 (16 replies)
Pages... 2

Has Trade Me had its day?
Created by Rikkitic, last reply by richms on 27-Nov-2015 13:29 (95 replies)
Pages... 5 6 7

Black Friday 2015 - Post Deals here
Created by Finch, last reply by Krishant007 on 30-Nov-2015 09:49 (73 replies)
Pages... 3 4 5

DSLAM Ports - Lockups, Reset vs Refresh?
Created by datahawk, last reply by mercutio on 29-Nov-2015 19:37 (13 replies)