5 Feb 2013

Chorus calls for overhaul of broadband rules

7:17 am on 5 February 2013

Telecommunications network provider Chorus is calling for an overhaul of the rules around delivering broadband, saying the existing framework fails address industry concerns.

In December last year, the company's share price slumped following proposed cuts to copper-based broadband charges by the regulator, which Chorus claims will cost in $160 million a year and undermine the transition to the new ultra-fast broadband network which the Government is part-funding.

In a submission to the Commerce Commission, Chorus is critical of the regulator's pricing methodology and says it plans to apply for an extensive review that it argues should give it more certainty on prices.

Analysts say cutting copper prices could risk the take up of new fibre network, because customers would have less incentive to shift.

Chorus is also critical of the commission's methodology for pricing and plans to apply for an extensive review of the unbundled copper local loop service that should give it more certainty on prices.

Chorus general manager of market and sales Victoria Crone says the firm wants a clearer regulatory environment to encourage the transition to the fibre network.

She says complex problems need to be worked through in terms of getting the incentives right to ensure the transition is a success.

Ms Crone says this covers a range of things from pricing to encouraging businesses to invest in new services over fibre.

She says Chorus wants a better framework that reflects the cost and its investment in delivering a broadband network.

Ms Crone says Chorus is investing $2.5 billion and the other local fibre companies have substantial investments on top of that.

She says New Zealand is lagging behind in the quality of its broadband infrastructure services which is why fibre is so important.