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Current as of 21/11/14 07:40PM NZST

Hamish Fletcher

Business reporter for the NZ Herald

Telecom takes complaint against Chorus

Carrying the signal: Chorus has proposed two new broadband services /pic supplied
Carrying the signal: Chorus has proposed two new broadband services /pic supplied

Telecom and Chorus are in their first big squabble since they split up, with the phone and internet company complaining to regulators over its former network-arm's proposed changes to wholesale broadband services.

The Commerce Commission said this morning it is investigating a Telecom complaint that Chorus' proposed changes could breach the Telecommunications Act.

The complaint was contained in a submission from Telecom on Chorus' proposed new broadband services. These new services - called Boost HD and Boost VDSL - are designed to compete with a regulated unbundled bitstream access service (UBA) which Chorus provides.

UBA is a service allowing internet retailers to provide broadband to customers over Chorus' copper network without needing to have their own equipment in a telephone exchange. The commission sets the terms of this service and its price.

Cuts to the price, due to come into effect in December, caused a raging brouhaha in the telecommunications industry last year.

Telecom, in its submission to the commission on the Boost services, said Chorus proposed to significantly degrade the service performance of regulated UBA."

As a customer, we are satisfied with the UBA service Chorus provides us...we do not see sufficient commercial value in the Boost throughput commitment to pay the proposed premium, as it does not appear to us to add anything to the service experience out customers receive today," Telecom said it is submission."

Chorus now proposes to contemporaneously degrade the performance of the regulated UBA service by imposing an artificial cap on the available throughput of 250kps [kilobits-per-second] per line for the regulated UBA services in order to create the commercial space for the Boost products.

This amounts to a significant degrading of the service performance of the regulated service...," Telecom said.The commission said CallPlus had also raised concerns "over the legality of Chorus' proposal".

In a statement to the stock exchange this morning Chorus said it was "currently over-delivering on its regulatory requirements today, and will continue to do so".

"Chorus is proposing traffic management on the best efforts UBA service which will ensure that the service remains fit for purpose at around today's observed levels.

Chorus also believes that its proposed new commercial "Boost" services offer distinct new capability and services that facilitate RSP competition and innovation, and successful implementation of these services is in the interests of end users," the company said.

Independently of the Telecom complaint, the commission is required to assess whether the Boost services are materially different from the regulated UBA service and can be priced separately.

Telecom and Chorus split in late 2011 so the network company could take part in the Government's ultra-fast broadband scheme.

- NZ Herald

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