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Telecom argues for certainty through lower copper input price

Telecom argues for certainty through lower copper input price

Supports Option 3 in Telco Act review document, and backs $37.50 access.

In its ‘pro-certainty’ submission to the ‘Review of the Telecommunications Act 2001: Discussion Document’, Telecom NZ, argues the input price for wholesale access to copper broadband should be at the bottom end of the Government’s proposed ranged.

This would put the figure at $37.50 in a range which extends to $42.50, resulting in the largest price drop for consumers, according to the telecommunications provider.

Telecom’s submission also supports Option 3 of the document, which refers to the government setting a new UCLL price. This option involves the Government selecting a total copper (UCLL plus UBA) price point within the range (step one), then locking the UBA price at a level set through benchmarking by the Commission (step two); the UCLL price would be the difference between steps one and two.

“Previously, Telecom worked toward a joint industry solution from all major retail service providers, which propose to Government a wholesale copper access price of $37.50 and requested some enhancement of UFB products to make them even more attractive to consumers,” Telecom CEO, Simon Moutter, said.

“The $37.50 price sits at the bottom end of the Government’s propose range of options and will quickly deliver savings to consumers, is a fair wholesale price and delivers on the Government’s goals for the UFB rollout.”

Telecom claims this allows the Commerce Commission to continue its process of setting a cost-based wholesale price for broadband services delivered over copper, and also allows the Ministry of Business, Innovation and Employment to adjust the wholesale price for a basic copper line so the combined copper wholesale price is within the Government’s indicative range.

The telco believes this will allow the price to be set by December 2014, offering the industry more certainty on pricing through to 2020.

“Ongoing debates about copper pricing risk distracting our industry and customers from the far more important questions of how, as a country, we can best take advantage of the very valuable fibre assets we are investing in,” Moutter said. “Above all else, our industry needs input pricing certainty.

Nermin Bajric is IDG's coordinator for the Reseller News NZ website. His primary point of contact is email via: nermin_bajric@idg.co.nz


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