Cost row continues between Chorus and regulator

  • 17/08/2015
Cost row continues between Chorus and regulator

By Jonathan Underhill

Chorus has made a further submission to the Commerce Commission ahead of the final determination on pricing of its copper network, saying the regulator's model understates costs.

In its draft determination released in July, the regulator proposed setting the total price Chorus can charge for wholesale broadband services at an average $38.43 per month.

It will deliver its final verdict in December.

Chorus said the commission "still needs to do more to take credible New Zealand costs into account where that information clearly exists". It cited costs to dig trenches as an example, saying they had been "drastically reduced in their hypothetical model".

"We have genuine, tested in market, up to the minute, accurate information. The hypothetical trenching rate used by the commission in its model is less than half of the true cost," Chorus general counsel Vanessa Oakley said.

She said a commission-applied 30 per cent reduction to transaction costs did not match their own costings.

Chorus had sought the review of network pricing that was released in draft form in July after claiming the original decision, based on international benchmarking, would force it to cut prices too steeply and put its investment in building a nationwide fibre network at risk.