Menu
Chorus loses appeal to overturn UBA's initial pricing process

Chorus loses appeal to overturn UBA's initial pricing process

The judge in the appeals court rejected all of Chorus’s arguments, finding that ComCom had done what Parliament had prescribed, if not more, in setting the IPP price.

Chorus’ appeal to overturn the High Court’s judgment in April this year on the unbundled bitstream access (UBA) price set by the Commerce Commission’s (ComCom) initial pricing principle (IPP) process was dismissed by the Court of Appearl today.

Chorus had sought to challenge the November 2013 determination by ComCom setting prices for the use of its copper wire network.

“We’re clearly disappointed by today’s decision to maintain the status quo, but it is not entirely unexpected,” said Vanessa Oakley, Chorus' general counsel.

“Today’s regulatory environment is completely out of kilter with the industry’s structure and the effective delivery of the Government’s policy. We felt it necessary to appeal the High Court’s decision to try to get some further clarification on the fundamental issues around pricing UBA in New Zealand.”

The judge in the Court of Appeal rejected all of Chorus’s arguments, finding that ComCom had done what Parliament had prescribed, if not more, in setting the IPP price.

ComCom set the UBA monthly price at $34.44 per line to apply from 1 December 2014. The price consists of an additional UBA component of $10.92 and the unbundled copper loop price of $23.52, which was set earlier by ComCom. The new price is significantly lower than the existing UBA component price of $21.46.

On appeal Chorus repeated its earlier claim that the regulator erred in law when setting the $10.92 UBA component price. Chorus argued that ComCom had wrongly directed itself not to go beyond the Swedish benchmark, which was the higher of the two international benchmarks used to set the price, and failed to consider the evidence for different New Zealand “costs drivers” that might have required a higher price.

Chorus also alleged that ComCom had not respected the requirement to incentivise innovation and investment, particularly the building of a nationwide fibre network, in making a price reduction from $21.46 to $10.92 per month.

Following the judgement, Chorus has invoked the final pricing principle (FPP) review process under the Telecommunications Act. It is anticipated that the review will not be completed before April 2015..

Read more: Hitachi Data Systems and Global Storage partner on local Cloud

ComCom has welcomed the Court of Appeal judgement.

Telecommunications commissioner, Stephen Gale, said, “Today’s decision will allow the Commission and industry to focus on the cost modelling required to set the UBA price in accordance with the FPP. We look forward to being able to provide a draft decision in early December.”


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags hitachi data systemsComComChorusCommerce Commissionubaunbundled bitstream accesscopper wireFPPfinal pricing principlecourt of appealIPPinitial pricing principle

Featured

Slideshows

Malwarebytes shoots the breeze with channel, prospects

Malwarebytes shoots the breeze with channel, prospects

A Kumeu, Auckland, winery was the venue for a Malwarebytes event for partner and prospect MSPs - with some straight shooting on the side. The half-day getaway, which featured an archery competition, lunch and wine-tasting aimed at bringing Malwarebytes' local New Zealand and top and prospective MSP partners together to celebrate recent local successes, and discuss the current state of malware in New Zealand. This was also a unique opportunity for local MSPs to learn about how they can get the most out of Malwarebytes' MSP program and offering, as more Kiwi businesses are targeted by malware.

Malwarebytes shoots the breeze with channel, prospects
EDGE 2019: Channel forges new partnerships during evening networking

EDGE 2019: Channel forges new partnerships during evening networking

Partners, vendors and distributors reconnected during a number of social gatherings during EDGE 2019. The first evening saw the channel congregate for a welcome party at the Hamilton Island yacht club, while the main poolside proved to be the perfect stop for a barbecue on the final night.

EDGE 2019: Channel forges new partnerships during evening networking
Show Comments