17 Aug 2015

Chorus calls for charges based on 'real costs'

2:14 pm on 17 August 2015

The price Chorus can charge users on the network should be based on real costs, rather than on the Commerce Commission's hypothetical model, the company says.

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Photo: RNZ

Chorus general counsel Vanessa Oakley said the regulator was not using accurate information to determine the final price it could charge customers; the commission's hypothetical cost for trenching was less than half the true cost, based on the rates Chorus currently paid to build its new fibre network.

The commission had taken on board some of the points it raised in the last round of submissions but it still needed to do more to ensure real New Zealand costs were taken into account, she said.

The pricing uncertainty was likely to send a strongly negative signal to domestic and international investors.

"It is our view that the commission still needs to do more to take credible New Zealand costs into account where that information clearly exists.

"If the commission doesn't do this, then it is sending a strongly negative signal to domestic and international investors who would otherwise enable improvement and innovation in network industries throughout New Zealand."

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