User groups have criticised the Government's plans to change the way telecommunications companies charge for the use of the old copper network.
Chorus will have to cut its charges for access to its copper network by up to $7.50 per connection, under the proposed review of regulations.
But the company says it is significantly better than the Commerce Commission's proposed pricing, which Chorus said would significantly impact on its earnings.
The new option is part of a Government review of regulations covering the transition from copper to the new fibre telecommunications network.
The document suggests the price should be based on the cost of the new fibre network, instead of complicated international models.
It suggests that the wholesale price Chorus charges providers is between $37.50 - $42.50 per connection.
That is $2.50 - $7.50 lower than its current charge, but better than the Commerce Commission's proposal.
Chorus' share price rose 4.5% on the news to $3.03, close to the level it was before the Commerce Commission released its proposal.
Telecom said pricing certainty will allow it to get on with competing in the marketplace through innovation, product differentiation and quality service.
Submissions on the first phase of the review have to be made by 13 September.
User groups critical
User groups are warning consumers will be worse off under the Government's plans.
Telecommunications Users Association chief executive Paul Brislen does not agree the plan will bring down prices.
"I don't think consumers will notice any difference in terms of pricing, I think what'll happen is this is a wholesale price that she's [the minister] talking about; the retail ISPs will soak that up. It's a minor movement in terms of pricing.
Mr Brislen says the Government should leave the price setting in the hands of the Commerce Commission.
Internet New Zealand chief executive Jordan Carter says prices will be higher than under the proposal put forward by the Commerce Commission.
Mr Carter and Mr Brislen are criticising the Government's attempt to sideline the commission.
Labour's communications spokesperson Clare Curran says the Government's proposal will only provide certainty for Chorus and it's essentially a hand-out.
Ms Curran says the change will increase the uncertainty for small companies trying to break into the broadband market.
