Vodafone welcomes High Court decision

Vodafone welcomes High Court decision

Vodafone is pleased with the High Court ruling that calls for the Commerce Commission to reconsider its cost model for the Telecommunications Service Obligation (TSO).

The High Court has ruled that the Commission made an “error of law” in its assessment of the cost of providing the TSO for the 2004/2005 and 2005/2006 determinations.

The Judge has set aside the TSO costs for both determinations and calls on the Commission to reconsider its model in light of its failure to calculate the unavoidable costs to an efficient operator.

Vodafone argued that the TSO should be based on the most efficient technology available and the Commission should consider wireless and mobile technologies when assessing Telecom’s costs in providing the TSO. The Commission disagreed. The High Court Judge stated: "I am satisfied that the Commission erred in law ... by ceasing to introduce new technology into the modelled network"*, and referred the issue back to the Commission for further consideration.

Vodafone’s GM of Corporate Affairs, Tom Chignell, says the decision is a welcome one.

“The ball is now in the Commerce Commission’s court. It will have to review its approach to cost modelling not only for these determinations but potentially for all of the other TSO determinations as well,” says Chignell. Currently Vodafone is challenging the 2006/2007 and 2007/2008 decisions in the High Court. The draft determination for the 2008/2009 year has been released but not a final determination at this stage.

“Vodafone would be receptive to working with the Commission and Telecom to agree a commercial solution” says Chignell.

Vodafone has also recently been granted leave to take the earlier Commerce Commission decision to the Supreme Court.

ENDS

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