Regulator seeks feedback on tweaks to Chorus regulation

Chorus CEO Mark Ratcliffe
Chorus 12-month price history (NZX.com)

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The Commerce Commission is seeking feedback on Chorus's [NZX: CNU] plans to deliver broadband services outside the current terms of regulation, and expects to make a final decision in early September.

The antitrust regulator is assessing whether Chorus can introduce variant unbundled bitstream access services, which it claims would increase the reliability of high-definition video services, and the company's plans to withdraw very fast digital subscriber line (VDSL) services and bandwidth management of the VDSL service in relation to the migration to fibre services. At a workshop the commission held on June 20, industry participants were concerned the proposed changes to the UBA services were unclear and may adversely impact consumers, the regulator said in a statement.

The commission is considering the extent to which the new variant services would complement or substitute existing regulated UBA services, what investment they would need, and whether the changes are consistent with the Telecommunications Act. The regulator will also consider whether the proposed changes, including the withdrawal of the VDSL and bandwidth management services, are allowed under existing regulation, and what the impact will be on consumers.

Submissions are open until July 15, with cross-submission due three days later. A final decision is due on Sept. 9.

Last year the commission proposed cutting the network operator's pricing on its copper line services, which Chorus said left a $1 billion hole in the funding for the roll out of the government-sponsored UFB. In March, Crown Fibre Holdings gave Chorus greater flexibility in building the network provided it meets the agreed deadline, and has aligned funding with completed work.

Chorus is appealing a High Court ruling upholding the way the regulator set a theoretical price for services on the copper lines, and has also requested a more complete final pricing principle method is used to set the price. The regulator anticipates it will come up with a final price by April next year.

The Wellington-based company's shares fell 1.2 percent to $1.72, and have gained 21 percent this year.

(BusinessDesk)


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