4 Feb 2013

Chorus submission on internet charges

8:29 pm on 4 February 2013

Chorus wants to stop the Commerce Commission from cutting the amount it can charge internet service providers for copper-based broadband, saying it will hamper moves to the new ultrafast broadband.

The company has made a submission to the commission in response to a proposal to cut what it can charge for broadband bitstream access (UBA) on the existing copper-based network.

Chorus' share price tumbled after the December announcement which Chorus said could cost it up to $160 million per year.

As the Government's major broadband partner, Chorus expects to invest around $2.5 billion over eight years on the new fibre network to improve broadband services.

But it says the shift to new technology is undermined by an outdated policy framework and the proposed cut in copper-based broadband prices.

It says the commission's pricing proposal will have a major impact on fibre uptake because it will make copper services more attractive to internet service providers and their customers.

Chorus says analysts are downgrading fibre uptake forecasts.

They are questioning how Chorus can achieve the Government's aspirations for 40% - 45% by 2020, or even a minimum 20% uptake set by its UFB contract.

The company says it wants an outcome that better reflects the true measure of the cost and investment required to deliver better broadband.