Commission welcomes Chorus appeal judgement

The Commerce Commission has welcomed the Court of Appeal judgment in relation to Chorus’ appeal against the Commission’s November 2013 decision setting benchmarked cost-based prices for the unbundled bitstream access (UBA) service.

Announced today, the decision upholds the previous High Court decision in April 2014.

“Today’s decision will allow the Commission and industry to focus on the cost modelling required to set the UBA price in accordance with the 'final pricing principle'," says Stephen Gale, Telecommunications Commissioner.

"We look forward to being able to provide a draft decision in early December.”

The Telecommunications Amendment Act 2001 introduced a new cost-based pricing principle for the UBA service, to have effect from 1 December 2014.

The Commission completed a pricing review of the UBA service on 5 November 2013 – setting forward-looking cost-based prices for the UBA service by benchmarking the additional costs of providing the UBA service.

On 2 December 2013, Chorus appealed the Commission’s November 2013 decision to the High Court on a question of law.

On 8 April 2014, the High Court dismissed Chorus’ appeal. On 11 April 2014, Chorus sought leave to appeal the High Court’s judgement.

In addition, the Commission received five applications to calculate the price for the additional costs of the UBA service in accordance with the final pricing principle (FPP) – total service long-run incremental cost (TSLRIC).

Following receipt of these applications, the Commission has commenced the process to determine a cost-based price for UBA under the FPP.