The Commerce Commission has today released its final decision setting the prices that Chorus can charge for use of its local copper lines and broadband service over the next five years. These are wholesale prices that Chorus charges retail telecommunications companies.

From tomorrow, the maximum monthly rental prices that Chorus can charge for its unbundled copper local loop (UCLL) and unbundled bitstream access (UBA) service for the first year are $29.75 and $11.44 per month respectively – a total of $41.19. This is an increase from the July draft decision, which proposed a UCLL price of $26.74 and UBA price of $11.15, with the total being $37.89 for the first year.

The maximum monthly prices increase slightly each year for the next five years, but average a total of $41.69 over that period. Tables detailing the UCLL and UBA price components for the next five years and set during this process are included in the background below.

The current price of $34.44 per month was established by international benchmarking at the end of 2013 and came into effect on 1 December 2014. Prior to 1 December 2014, Chorus was able to charge $44.98 per month for its wholesale broadband service.

The Commission has confirmed in a split decision it will not backdate the final UCLL and UBA prices, meaning Chorus cannot recoup the difference from the current price over the past year from retail telecommunications companies.

Telecommunications Commissioner Dr Stephen Gale said modelling the UCLL and UBA prices, as set out under the Telecommunications Act, had been a complicated and lengthy process and the Commission appreciated the expertise of stakeholders who had engaged with it throughout the project.

“This is the most complex and extensive economic model the Commission has ever been tasked with creating, evidenced by the 240 submissions – totalling more than 6000 pages – we have received during our consultation process,” Dr Gale said.

“After considering submissions and reviewing our July draft decision we have made several changes to correct technical errors and account for updated or additional costs in our model. Significant changes, such as the need to increase the amount of trenching required to physically lay the network and adjusting the make-up of fibre and fixed wireless connections, led to the final price rising. This has been partially offset by other changes, including a decrease in the allowed rate of return for Chorus due to the fall in interest rates since July, and the removal of vacant properties from the model.”

The final determinations can be found on the Commission’s website.