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Chorus: Corporate welfare despite high profits

Communications and IT Spokesperson

26 August 2013 MEDIA STATEMENT

Chorus: Corporate welfare despite high profits

Chorus continues to pull off its sleight of hand after posting a $171 million profit today while asking for $100 million a year in corporate welfare from the National Government, Labour’s Communications and IT spokesperson Clare Curran said today.

“Chorus sure has chutzpah. It posted a higher than expected profit yet it insists it needs a bailout from the Government to roll out the taxpayer funded ultrafast broadband scheme.

“Amy Adams is giving Chorus a ‘copper tax’ worth an estimated $100 million by requiring all copper broadband prices to be the same as Chorus’s fibre broadband, so the company can’t be undercut.

“The majority of Kiwi households that use copper broadband services will have no choice but to pay more than they should, despite the Commerce Commission recommending their charges be cut by $12 a month.

“Chorus shouldn’t have a leg to stand on but the Government appears set on allowing the company to rort the entire telecommunications regulatory framework. This comes at the expense of every other network operator and Kiwis who will pay more for their broadband than they should for years to come.

“Even more extraordinary is that the Government’s new review appears to allow Chorus to use competitive pricing of copper in the areas where it doesn’t control the fibre rollout.

“While the review aims to prevent big cuts in copper broadband prices that could affect demand for fibre, the document says Chorus should be allowed to drop its copper prices in areas served by other fibre companies[1].

“In other words Chorus can undercut the three smaller taxpayer UFB companies in Northland, the mid North Island and Canterbury in order to protect its own business.

“This is called pocket pricing, It is an extraordinary rort.

“Amy Adams in no longer the Minister for Communications – she is the Minister for Chorus,” said Clare Curran.


[1] “The review document states: ‘Chorus can set wholesale prices below the regulated price cap to match competition in fibre from those areas, if necessary to compete effectively with the [local fibre companies]’.

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