Adam Bennett

Adam is a political reporter for the New Zealand Herald.

Chorus get-together draws flak

Network company forks out for flights and staff gathering after crying poor when told internet prices must fall.

Photo / APN
Photo / APN

Network company Chorus is flying about 200 staff from Wellington to Auckland today for an annual get- together - despite "crying poverty".

The company was dealt a financial blow last week when the Government acknowledged it could not override a Commerce Commission ruling it must cut what it charges retail service providers for copper based wholesale internet services. The company has warned the commission's ruling - the prices must drop from $44.98 a month per customer to $34.44 - could lead it to default on its debt.

However, Chorus spokesman Ian Bonnar yesterday confirmed it would go ahead with this year's "Chorus Day" in Auckland.

Labour Leader David Cunliffe said the event suggested "a culture there which indicates that they may not be as poor as they are crying out to be".

He noted the company also paid out dividends of almost $100 million to investors last year but was still "crying poor and expecting a taxpayer bailout".

Telecommunications Users Association chief executive Paul Brislen also questioned the suitability of holding the event at this time.

"There is a lot to be said for getting everybody together to celebrate the year and to bond as a team but at the same time as crying poverty it doesn't sit terribly well."

Mr Bonnar said Chorus had twice been recognised as one of the best employers in Australasia, "and a big part of that is once a year we get all our people together".

"It's to hear from the senior people in the business where the organisation is at, where it's going, what its strategy is and how what they do fits in with it."

Mr Bonnar said that in previous years the event was followed by "a few drinks afterwards ...", that would not take place this time around.

"Given we're potentially going to be losing a significant proportion of our revenue and a very high proportion of our profitability, we're having to look at everything we do."

He said the day would be run in a "very cost-effective" way.

The Government was considering passing legislation to overrule the commission's ruling but that was headed off by a co-ordinated announcement by all other parties in Parliament last week that they would not support such legislation. The Government is concerned the cut in revenue may affect Chorus' ability to meet its obligation to roll out much of the new Ultrafast Broadband network (UFB).

It has commissioned an independent report to examine the impact of the commission's ruling on its finances and its ability to fund its UFB obligations. A draft is due on Friday.

- John Key on UFB rollout - 'come hell or high water'-

Prime Minister John Key says ultra-fast broadband will happen "come hell or high water'' - despite the Commerce Commission throwing a spanner in the works over Chorus.

The commission has recommended cutting wholesale copper broadband prices, which network company Chorus says could threaten the taxpayer-subsidised roll-out of ultra-fast fibre broadband.

A Government proposal to override the commission was thwarted by support parties last week.

It is now awaiting an independent review of whether Chorus can afford the commission-imposed cut in wholesale prices, which is due this week.

Mr Key told TVNZ's Breakfast this morning that Chorus could go broke under certain circumstances, but the Government was very committed to the ultra-fast broadband roll-out.

"We are going to have to have a look at that contract, we're going to have to look at what our options are when we get the independent report.

"But in the end, we want ultra-fast broadband on the timetable we want it to go ahead, and someone's got to pay for this. If Chorus can't pay for it then we have to work out who is going to.''

Mr Key said New Zealand needed ultra-fast broadband to be competitive.

"We're going to make it happen, come hell or high water. We'll just work out what those waters look like as we navigate them.''

The way forward could not be legislation because the Government did not have the numbers, Mr Key said.

"The reality is, Chorus have a contract with the Government and, this is the one point to remember, the Commerce Commission has thrown a spanner in the works.

"Fair enough, no one predicted that. But if we don't ensure that ultra-fast broadband is built on time, you as as consumer, New Zealand as a country, our children as learners, our hospitals as medical facilities will be held back relative to other countries.

"And as a country we can't afford that.''

- Chorus sings the blues -

* Chorus says the Commission ruling to cut copper broadband prices will slash its revenue and jeopardise the ultrafast broadband (UFB) rollout.

* A Government move to overrule the commission was sunk last week by minor parties.

* An independent review of Chorus' financial situation and its ability to build the UFB network is expected this week.

* The Government has the option to "step in'' and assume control of Chorus if necessary.

- NZ Herald

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