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Industry groups off-chorus on ComCom delays

By Heather Wright, Wed 22 Apr 2015
FYI, this story is more than a year old

InternetNZ has dubbed calls for speed in the Commerce Commission’s copper final pricing principle process for wholesale broadband ‘self serving’ and says they need to be ignored.

Jordan Carter, IntenetNZ chief executive, says acting in haste in making a decision of the final pricing internet retailers will pay for broadband services and line access, risks errors resulting in higher prices for ISPs and consumers.

“If we act in haste, then we’re forced into trusting Chorus’ data and only Chorus’ data in making this decision. And that’s like leaving a rabbit in charge of the carrot patch.”

Carter’s comments come after New Zealand Shareholders Association chairman John Hawkins lashed out at a further extension in the timetable on pricing reviews, with final decisions now expected by December.

Hawkins says the delays have now added ‘at least a year to the process’ and says the Commerce Commission’s ‘monopoly position’ is resulting in service standards ‘well below’ what it expects from the industries it regulates.

Hawkins says the pricing determination and the degree to which it was backdated are crucial factors for Chorus shareholders who are receiving no dividends while the company struggles to handle capital commitments with reduced earnings.

He went on to say that the regulatory uncertainty that has dogged the process meant there was ‘a real possibility’ investors would be reluctant to commit funds to develop future communications technology.

“The Commerce Commission needs to get its act together as these repeated delays are prolonging the regulatory uncertainty and damaging the credibility of the New Zealand capital market,” he says.

Carter fired back, saying calls for speed from Chorus shareholders needed to be ignored.

He says the Commerce Commission has ‘a big important job’ ensuring that they balance the interests of Chorus, ISPs and consumers in getting the price of copper right.

“Rushing this work risks errors, and errors risk higher prices for internet users in New Zealand, which is just gifting Chorus money. So of course they want haste.”

Carter says the Commerce Commission needs to invest appropriate time to get the detail right.

“That there has been four resets of this process to date shows that the Commission is listening – and that is to be commended.”

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