Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Regulation to blame for sharp copper price cut, lawyer says

Regulation to blame for sharp copper price cut, not Commerce Commission, lawyer says

By Paul McBeth

March 18 (BusinessDesk) - Sweeping changes to laws governing the telecommunications sector were to blame for size of the drop in what Chorus can charge for access to its copper lines services, rather than the Commerce Commission’s decision to impose the cut, the High Court heard today.

Counsel for the regulator, John Farmer QC, rejected claims by Chorus that it had erred in law by choosing two nations to act as a benchmark price without an evidential basis or that it hadn’t correctly followed section 18 of the Telecommunications Act, which seeks to minimise the risk regulation would have on investment and innovation in the sector.

Farmer said the shift in how the commission would set the price using a forward looking cost-based model informed the new price, which had previously been set using retail pricing under a vertically-integrated monopoly.

“It was the change in regulation that caused the shock, not the Commerce Commission decision made under that new regulation,” Farmer told the High Court in Wellington.

The regulator didn’t need to account for the section 18 provision throughout the whole process, and only had to show the piece of the act wasn’t ignored, he said.

Chorus is appealing the commission’s final determination in November last year setting the unbundled bitstream access monthly price at $34.44 per line, up from the $32.35 price initially mulled in its draft decision, with the additional UBA component accounting for $10.92 and the unbundled copper local loop accounting for $23.52.

Earlier today David Goddard QC, counsel for Chorus, said the company wants to have the initial decision set aside if it’s successful in its appeal, for the commission to undertake the review again. The initial pricing principle is a proxy for the regulator to try and determine the full-cost of replacing the copper network using international comparisons, rather than going through a more rigorous process called a final pricing principle.

Goddard said such a review shouldn’t undermine the work that’s already underway to determine a final price, as a separate component of the copper network, the unbundled copper local loop, is still proceeding.

Justice Stephen Kos said he would have “serious reservations” about the impact of setting aside the review and ordering the process to start again.

The judge-alone hearing is into its second day, and is continuing.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Speaking For The Bees: Greens Call For Neonicotinoid Pesticide Ban

The National Government should ban the use of controversial pesticides called neonicotinoids after evidence has revealed that even at low doses they cause harm to bee populations, the Green Party said today. More>>


Science Awards: NZAS Celebrate NZ Scientific Achievements

The Marsden Medal is awarded for a lifetime of outstanding service to the cause or profession of science, in recognition of service rendered to the cause or profession of science in the widest connotation of the phrase. This year’s medal is awarded to Dr Mike Andrews. More>>


Court Rules: Affco 'Unlawfully' Locked Out Meat Workers

The note says the full court found for the plaintiffs, "that is that the defendant locked out the second plaintiffs unlawfully and that it breached s 32 of the Act by acting otherwise than in good faith towards the plaintiffs while collective bargaining was still going on." More>>


New Bill Introduced: GST On Online Services

These measures are an important first step in the Government’s efforts to deal with increasing volumes of online services and other intangibles purchased from overseas suppliers that should, under New Zealand’s tax rules, be subject to GST. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news