“We have consistently said that the previous draft prices significantly underestimated the true value of Chorus’ network”.
“We need a more mature approach to regulation that reflects the fact that these sorts of violent swings raise the overall cost of capital of regulated businesses,” he said.Spark managing director Simon Moutter makes the same point from a business investment point of view:
“The massive swings in successive Commerce Commission decisions within a matter of months makes it extremely hard for any business to invest, plan and price its services effectively. We have now had two years of market disarray, with significant fluctuations at every stage of the process. The losers out of this are New Zealand consumers and businesses.”
“The pricing set today is even higher than the in the Commission’s draft decisions and is well out of step with international benchmarking”.
“We pay more for fixed broadband than most developed countries – research from the International Telecommunications Union (ITU) put us in the 60th place in the world.
”Australia, hardly a poster boy for great, affordable internet access, is twenty places ahead of us, and New Zealand will drop even further down the rankings as pricing here goes up.”
“These prices will have a direct impact on users, and especially those users who are unable to take up UFB services. These include the 20 percent of the population who live rurally, and who have no other fixed line options and will continue to rely on copper phone lines for the foreseeable future.”
“Rural Kiwis will get hit hardest by the Commerce Commission’s decision allowing Chorus to charge its regulated copper line customers almost $8 a month more than New Zealand retail broadband providers, says New Zealand First.”Chorus is a wholesaler, it can’t sell direct. The retail broadband providers do this. So that paragraph is meaningless.
“Today’s shock announcement of a 10 percent increase in the regulated wholesale copper phone line price will cost all households – particularly in areas where they are still waiting for ultra-fast broadband”.That’s a good point. I’m not due to get UFB for at least two years. Having to pay more for an inferior network makes it feel like I’m doubly penalised.
“The cost of a landline is set to rise by about $3 a month after a surprise ruling by the country’s competition watchdog that has put a rocket under Chorus’ share price.”He goes on to mention a possible silver lining for Spark customers: “who may not to have to pay more immediately, or who could be in for a one-off $40 refund.”
“UFB is fibre based and so does not have the same regulatory pressure that copper lines have. It’s also being built by four companies, not one, although Chorus has the lion’s share of the project and each Local Fibre Company (LFC) has, in effect, a regional monopoly.
“UFB uptake has been low to date but ultimately it will be the network of choice for everyone who can get it. It is world class and, if we look at the Australian debacle, somewhat in a league of its own. But users shouldn’t be forced to take it up it and for those who will never get it, the copper tax will be a cost they can’t avoid.
“…while all this is over for now, the entire Act is being reviewed and by 2020 a new regime will be in place – the fourth major overhaul since 2001.Which is a good point. It seems that once it gets started, a government can’t stop tinkering with telecommunications policy.