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Ultimate Geek
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Topic # 157453 2-Dec-2014 08:39
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Well looks like its going backwards..


Current:  $44.98
Original draft:  $34.44
New draft: $38.39

http://www.stuff.co.nz/business/industries/63734256/chorus-broadband-decision-a-middling-result





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  Reply # 1186757 2-Dec-2014 08:56
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Just saw myself on the Commerce Commission website http://www.comcom.govt.nz/regulated-industries/telecommunications/telecommunications-media-releases/detail/2014/commission-releases-draft-decisions-on-prices-of-copper-lines-and-broadband-service-for-consultation

Guess Chorus will be happier. And it's with the governments desired range of $37.50 - $42.50 albeit at the bottom end. If the analyst quoted here is correct http://www.stuff.co.nz/technology/digital-living/63627150/congestion-slows-superhighway it will added about $88 million to Chorus's operating profit but I guess according to Chorus they will still have a funding shortfall of $500 million or something. (The analyst must be happy as the draft price is about in the middle of the range they suggested.)

Edit: As for others, my guess is most ISPs will be somewhat unhappy, but probably not majorly unhappy with this. I can't help thinking:

The Commission is also seeking the views from the sector on whether the Commission should conduct a section 30R review of the standard terms determination for the UBA service and if so, what the review should look at.


is a bigger point for ISPs. Particularly since I suspect that if the current price holds, despite it being better for Chorus than the older one, they're going to start looking at constraining the regulated UBA service again on 1 April 2015 http://www.comcom.govt.nz/regulated-industries/telecommunications/telecommunications-media-releases/detail/2014/commerce-commission-suspends-investigation-into-proposed-changes-to-chorus-regulated-uba-service and perhaps also removing the regulated VDSL service.

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  Reply # 1186758 2-Dec-2014 09:00
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Just for some clarification it's the copper component that's going to go up, not the wholesale UBA port cost.

Historically copper lines cost more in a rural area then an urban area. This changes on the 1st Dec when these were averaged out. This price will be increasing by $5 per month. The UBA port cost will decreases from $10.92 to $10.17

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  Reply # 1186759 2-Dec-2014 09:01
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Press release:


The Commerce Commission has today released draft decisions for consultation setting proposed prices that Chorus can charge for use of their local copper lines and broadband service. These are wholesale prices that Chorus charges retail telecommunications companies.

The proposed maximum monthly rental price that Chorus can charge for its unbundled copper local loop (UCLL) is $28.22, an increase on the current price of $23.52 that was established by international benchmarking at the end of 2012.

The additional proposed maximum monthly rental price for the unbundled bitstream access (UBA) service is $10.17, a small decrease on the price of $10.92 that was established by benchmarking at the end of 2013, and which came into force yesterday.

Today’s total proposed wholesale price for the UBA service will therefore be $38.39 per month, compared to the price that came into effect yesterday of $34.44 per month. Prior to yesterday, $44.98 per month was the price Chorus has been able to charge for the UBA service for the past few years.








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  Reply # 1186761 2-Dec-2014 09:03
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Personally I think that the landlines (both copper and fiber) should be publicly owned.

That way it is more of a public service, than a for profit company.
I really do feel sorry for those living rurally.


While I do accept that it is just a "con" of living rurally, I think that there needs to be some base speed (maybe at least 2-5 mbit) that must be achieved (with comparable pricing and data caps to urban options).
Some of these people living rurally grow our food and other produce. It would be nice if they could get a better offering.

Vodafones RBI is promising, but the data cap limits is what deters most of the people I have spoken to about it.



EDIT:

This was in response to the story here on the 2nd post:
http://www.stuff.co.nz/technology/digital-living/63627150/congestion-slows-superhighway




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  Reply # 1186942 2-Dec-2014 11:50
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Boo.

Any bluster aside from them aside, Chorus won and you can tell by how the sharemarket reacted.
A sad day for the NZ consumer, being shafted to prop up a publicly listed company with a government granted monopoly.






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  Reply # 1186967 2-Dec-2014 11:54
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Lias: Boo.

Any bluster aside from them aside, Chorus won and you can tell by how the sharemarket reacted.
A sad day for the NZ consumer, being shafted to prop up a publicly listed company with a government granted monopoly.




How is it sad for the consumer? Some of the consumers on the 700ish odd Conklin's that will remain after RBI might now face a real chance of being upgraded. With the copper cuts there was no hope for these people.

At the end of the day the Commerce Commission have clearly acknowledged they made a mistake. I've always accused them of being an inept organisation, but they do earn some respect back from me.





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  Reply # 1186977 2-Dec-2014 12:05
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I'd happily pay a bit more to see rural services improved. Not all consumers are that selfish.

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Reply # 1186980 2-Dec-2014 12:07
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linw: I'd happily pay a bit more to see rural services improved. Not all consumers are that selfish.


+1 common sense

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  Reply # 1187000 2-Dec-2014 12:23
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"Given today’s decision, we feel we have no choice but to undertake an urgent review of our current pricing across both voice and broadband plans.” - Spark
http://www.sparknz.co.nz/news/choruswholesaleprices/ 

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  Reply # 1187002 2-Dec-2014 12:33
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Okay so a handful of rural users might get some benefit, Chorus shareholders are laughing all the way to the bank, and the rest of us get shafted. Sue me for not being over the moon.

I have no issue with partially subsidised rural users, I used to live in town that's never scheduled for broadband, (okay it is in the arse-end of nowhere) but rural users should still pay more than urban dwellers. What I most strongly object to is the fact the government is busy subsidising a publicly held company that they have given a monopoly to, and just when it looked like the consumer watchdog was going to stomp on them they rolled over and played dead. 







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  Reply # 1187006 2-Dec-2014 12:35
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It seems no one in the industry is happy...

TUANZ:


The Commerce Commission draft decision on wholesale copper charges this morning has introduced new uncertainty for users of broadband services by proposing a $4 increase from their interim decision. Users have already seen the benefit of lower prices flowing through as a result of this process and improved competition. TUANZ expected that yesterday’s implementation of the interim prices would further reduce prices. This may now be reversed in April next year when the final price applies.

TUANZ is also concerned that the Commission has chosen not to make a formal statement on backdating at this point until they release a discussion paper on the issue.

The detail around these numbers is complex and detailed and TUANZ CEO Craig Young is concerned that the time for organisations to submit on the decision is limited.

“We will endeavour to submit as quickly as possible to fit in with the Commission’s timelines, however we certainly don’t want to be hasty,” said Mr Young.

“We will continue to participate fully in this process, always speaking for the end-users of these services. Our concern has always been over ensuring a fair and competitive market which is sustainable and continues to provide world class services to New Zealanders at fair prices.”


InternetNZ:


internetNZ is displeased that today’s announcement of a draft final pricing principle for copper broadband hasn’t provided the certainty the industry needs.

While disappointed that the price has come out higher than the amount set by the Commerce Commission earlier this year, InternetNZ respects the importance of a free and independent body making these decisions.

InternetNZ CEO Jordan Carter said that what the industry most needed at this point in time was certainty over the pricing and with the Commission’s refusal to make a position clear on backdating we have not got that.

“We’ve had a legal opinion that suggests that backdating should not be put in place. We don’t understand why the Commerce Commission didn’t take the opportunity to provide certainty when that is what every part of the industry has called out for.

“What the Commission has done is release a stack of documentation and asked organisations to digest a lot and make comment on in a very short span of time. We’re grateful that the Commission says that it will consider requests for extensions and we hope that isn’t an idle offer.

“From our perspective, it’s important that we get this process right, not rushed. “

InternetNZ is also worried about the disincentive to unbundling that the latest figures provide. Unbundling is important to providing competition in the industry, most broadband users are still using copper. This reduces competition in that space.

InternetNZ will now focus on working its way through the very detailed documents and may have further comment in coming days.


Spark:


Spark New Zealand said today it was undertaking an urgent review of all broadband and fixed voice customer pricing following the announcement by the Commerce Commission of proposed new wholesale rates that Chorus charges retail service providers, including Spark.

“Today’s announcement is unexpected and we are now facing costs approximately $60 million a year higher than we previously anticipated. These higher costs will affect all our fixed services, not just broadband services,” Managing Director Simon Moutter commented.

“For the past two years, we have been anticipating a $10 reduction in broadband costs, which has been reflected in our current customer pricing. But what we didn’t expect was a $5 increase in the cost for a residential or business line – for both broadband and standalone voice services. All of this comes on top of recently implemented increases in Chorus connection charges for broadband services.”

Mr Moutter said intense market competition meant the anticipated reduction in wholesale broadband charges (signalled by the Commerce Commission as far back as December 2012), had already flowed through into retail broadband prices.

“For instance, what you get in our basic $75 broadband plus home phone plan today would have cost you $105 three years ago. In that time, our wholesale costs have barely moved until the new charges came into effect yesterday.”

“Given today’s decision, we feel we have no choice but to undertake an urgent review of our current pricing across both voice and broadband plans.”

Mr Moutter said as well as the surprise increase in line charges, there is now considerable uncertainty about when these new charges will take effect – with the possibility of backdating any increase to 1 December 2014. “This means we will need to take a conservative view now to hedge against any financial exposure from the final decision.”

Mr Moutter said today’s announcement highlights the challenges as retail broadband providers fiercely compete to give consumers the best possible deals, yet face a continually shifting outlook in terms of their underlying costs.

“This is not a criticism of the Commerce Commission, which as the regulator is required to follow due process – or of the process itself which is inevitably complex given the transition from the previous regulatory regime.

“Over the last two years, we have consistently called for more certainty to ensure retailers can plan appropriately and deliver customers the best competitive deals. We led an initiative seeking an agreed industry solution for wholesale broadband charges, and we also welcomed the Government’s attempt to provide this certainty through legislation.

“Neither came to pass, meaning we - and the rest of the industry - were left with only the initial schedule of charges set out by the Commission in 2012 and 2013 to guide our budgeting and retail pricing. These initial charges were finalised by the Commission in November 2013, upheld by the High Court in April 2014 and by the Court of Appeal in September 2014. They have been anticipated by Spark and other providers in our existing customer pricing.”




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  Reply # 1187071 2-Dec-2014 13:14
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sbiddle: Just for some clarification it's the copper component that's going to go up, not the wholesale UBA port cost.

Historically copper lines cost more in a rural area then an urban area. This changes on the 1st Dec when these were averaged out. This price will be increasing by $5 per month. The UBA port cost will decreases from $10.92 to $10.17


so that extra 10$ i pay for living outside of the main centers still applies to myself + any other increases (from this change) or does this change only apply to people inside of Auckland etc?




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  Reply # 1187088 2-Dec-2014 13:51
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All the more reason to get everyone onto UFB!
Which yes, does have its own politics. But not this drama.



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  Reply # 1187121 2-Dec-2014 14:13
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linw: I'd happily pay a bit more to see rural services improved. Not all consumers are that selfish.



^ This, but I am not convinced that Chorus will use the money to better rural coms.

I would imagine it would result in higher returns to investors or something.



A better approach (imo) is to reduce the pricing further towards the original value, but impose a temp / long term levy that goes into a pool.

The money raised in the levy is then used to fund upgrades in rural areas or places where LFCs consider it not financially viable to upgrade / deliver service.



Again, thats just my opinion.




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  Reply # 1187123 2-Dec-2014 14:27
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It can't be that much of a shock to the ISPs. And if it was a shock, fire your management accountants for not doing models based on the different costs. Also, fire your board, because only a fully idiotic and shortsighted board would anticipate a decrease for two years and plan based on something that could realistically not eventuate. Yeah, we can see why they earn the big bucks.

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