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Will consumers subsidise the UFB rollout?

08 Aug 2013

Consumers will not benefit from lower prices for their copper broadband services under proposals announced by the government to overrule the independent regulator's draft pricing.

That's the view of Consumer NZ CEO Sue Chetwin, who believes the pricing for wholesale UFB and copper contained three options, all of which would see the price of copper much higher than the Commerce Commission is recommending.

"Not only is this bad news for consumers who will now be further subsidising the rollout of UFB, it is also particularly concerning that the government would over-rule the Commerce Commission, which is supposedly the independent regulator," Chetwin says.

"The roll-out of UFB was meant to compete with copper services so that consumers would have choice.

"That choice would be for cheaper copper and slower services or more expensive UFB with better quality and faster services on offer.

Released by Telecommunications Minister Amy Adams yesterday, Chetwin claims the government has succumbed to pressure from Chorus, which successfully tendered for most of the country's UFB roll-out and was planning to use high copper prices to pay for it.

"Effectively the announcement means ordinary New Zealanders will be subsidising Chorus and its shareholders," she says.

Consumer NZ will be joining Internet NZ and the Telecommunications Users Association in opposing the proposals, Chetwin adds.

Check out reactions from both Telecom and Vodafone by visiting Telco Review.

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