So this has been dragging on for a long time, with Chorus basically having a monopoly over the copper lines the charges they demanded were deemed unreasonable and were investigated by the Commerce Commission.
ISP's in NZ predicted around $34 and subsequently configured their pricing around this figure.
That would have been $9 cheaper than the current $45 each and every person is charged for using the copper lines going to your house.
So this now means that the ISP's have to accomodate for the $4 difference between what was predicted and what Chorus can actually charge.
Now here's what that's a steaming pile of turd..
The annoying thing here is "...The consulting firm told the Government Chorus was "at risk" of being unable to fulfil the contracts in the wake of a Commerce Commission ruling that will slash the price it can charge for access to its copper network from next December."
But how the hell can you honestly look me and say a company operating a monopoly at 17% profit in their maiden year, and 23% in the year after is going to have issues paying the UFB bills?
And why was the UFB contract awarded to them in the first place?
Their maiden profit: $103Mill from $603Mill sales in 2013.
And in 2014 they posted $148Mill from $648Mill in sales.
So my point is they're hardly struggling with a 23% profit margin?
Also the Commerce Commission ignored almost 50,000 people pleading with them to look at the wholesale price rate which would still be significantly higher than other countries even at the suggested $34!
See graph below, which is the expected ($34) vs other counties wholesale prices:
What does this mean for you and me?
Well it sends a signal to Chorus that basically they can continue to doing what they're doing. They've had a massive win with this decision, and it's sure to be reflected in their share prices.
What this means to you and I is we are going to have pay more for our broadband, I expect companies have already started to look at their plans and will probably increase prices. We've already been warned by Spark, Vodafone and others that they're going to increase their prices.
So tell me, (if you manage to make it this website, over your poor broadband connection) what do you think? Is the Commerce Commission being too lenient on Chorus, and allowing them to continue to gouge the working public over wholesale prices?