Chorus loses copper price court bid

Chorus workers lay fibre optic cable in Havelock North.  Photo / Glenn Taylor
Chorus workers lay fibre optic cable in Havelock North. Photo / Glenn Taylor

Chorus, the telecommunications network operator, has lost a bid to dismiss a Commerce Commission determination setting the price for services on its copper lines.

The High Court turned down the Wellington-based company's attempt to have the regulator's initial pricing principle set aside, and for the commission to redo the process after its first decision ordered Chorus to slash prices for access to its copper lines. The judgment leaves the status quo in place, which means the regulator will have to complete a more fulsome final pricing principle by Dec. 1, Chorus said.

"It was important that a regulatory decision of such significance for investment in communications infrastructure enabling better broadband for New Zealand was reviewed by the court," Chorus general counsel Vanessa Oakley said. "Our focus continues on the parallel commission processes that use cost modelling for the first time to review the benchmarked prices of regulated services."

At last month's hearing, Chorus claimed the regulator erred in law when setting the price Chorus can charge for access to its unbundled bitstream access services in that it didn't have any evidential basis to narrow its inquiry and ignored a section of the legislation aiming to support the government's goal of building a nationwide fibre network.

The commission rejected the claim, arguing that the change in regulation, rather than the decision, had shocked the market.

The shares rose 0.6 percent to $1.79 yesterday, and have climbed 24 percent this year, after being punished last year at the height of the regulatory uncertainty.

The commission, in a statement this morning, said it welcomed the High Court's judgement.

Telecommunications Commissioner Stephen Gale says the decision would allow the regulator to focus on completing the final pricing principle (FPP) review of copper line pricing by December.

- BusinessDesk

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n3 at 30 Jul 2014 20:21:00 Processing Time: 462ms