Menu
Chorus applies for FPP review, files for High Court appeal

Chorus applies for FPP review, files for High Court appeal

Troubled company looking for help with copper pricing review

Broadband infrastructure company, Chorus, has taken the next two steps in the broadband pricing review, both applying to the Commerce Commission for a final pricing principle (FPP) review of its initial pricing decision, and filing for a High Court appeal of the same decision.

This follows the company’s “regrettable but necessary” decision to withdraw its 2014 financial year dividend guidance last month.

“The decision to apply for an FPP and file for a High Court appeal have not been taken lightly by Chorus’ board and management, but the limitation of two benchmarked countries despite the specific factors set out in section 18 and 18(2A) has left us with no choice,” Chorus chief executive officer, Mark Ratcliffe, said.

“Completing the FPP processes for UCLL (Unbundled Copper Local Loop) and UBA (Unbundled Bitstream Access) could well mean that we take another two years to end up rebalancing at around the same aggregate price as we have today. There is also precedent for the revised prices from the FPP to be backdated.”

Ratcliffe said Chorus understands the Commerce Commission must operate within Telecommunications Act regulations, although claims its initial decision reflects regulations which do not align with the Government’s policy of a transition to fibre.

Former Telecommunications Commissioner, Ross Patterson, agrees, stating that, “The ladder of investment regulatory framework that is currently in place is designed over time to remove the natural monopoly of the access network.”

“However, the structural separation model adopted through UFB (ultra-fast broadband) accepts that the access network is a natural monopoly and building competing networks is inefficient. The two frameworks cannot co-exist efficiently.”

In total, Chorus will be investing around three dollars for every dollar of Crown funding to support the delivery of UFB ahead of demand. From 2008 to the end of 2011, about $500 million was also invested in upgrading the existing copper broadband network under Chorus’ fibre-to-the-node rollout.

The Crown has so far contributed about $160m in funding towards the UFB rollout in the form of debt and equity securities to be repaid by Chorus over time.

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags copper broadbandChorusUFBfibre-to-the-nodegovernment

Slideshows

Top 50 defining moments of the New Zealand channel in 2016

Top 50 defining moments of the New Zealand channel in 2016

Reseller News looks back on a tumultuous 12 months for the New Zealand channel, assessing the fallout from a year of sizeable industry change. Whether it be local or global mergers and acquisitions, distribution deals or job changes, the channel that started the year differs somewhat to the one set to finish it - Reseller News assesses the key moments that made 2016.​

Top 50 defining moments of the New Zealand channel in 2016
​Hewlett Packard Enterprise honours high achieving NZ channel

​Hewlett Packard Enterprise honours high achieving NZ channel

Hewlett Packard Enterprise honoured its top performing Kiwi partners at the second running of its HPE Partner Awards in New Zealand, held at a glitzy ceremony in Auckland. Recognising excellence across eight categories - from distributors to resellers - the tech giant celebrated its first year as a standalone company, following its official split from HP in 2015.

​Hewlett Packard Enterprise honours high achieving NZ channel
Nutanix treats channel partners to Christmas cruise

Nutanix treats channel partners to Christmas cruise

Nutanix recently took to the seas for a Christmas Cruise around Sydney Harbour with its Australia and New Zealand staff, customers and partners to celebrate a stellar year for the vendor. With the sun out, they were all smiles and mingled over drinks and food.

Nutanix treats channel partners to Christmas cruise
Show Comments