No UFB full disclosure requirements for Chorus until 2014 – regulator

The Commerce Commission, recently accused by the investment community of over-enthusiastically regulating Chorus, has revealed a relaxed timetable for regulatory disclosure for the Ultrafast Broadband (UFB) roll-out.

Under a last-minute amendments to the Telecommunications Act, the Commerce Commission – formerly excluded, to encourage private investment – was given oversight of the UFB.

The watchdog today said it would gradually phase in information disclosure requirements, which will include detailed information on costs, roll-out progress and customer numbers.

The first local fibre company disclosure report will not be until its 2014 financial year. There are partial disclosure requirements ahead of that time.

The four local compaies are Ultrafast Fibre, Northpower, Enable and Chorus. Chorus holds 79% o the project by premise.

"It's a sensible decision," Telecommunications Users' Association chief executive Paul Brislen told NBR ONLINE.

"There's no point putting in onerous disclosure requirements at this point in the process, before we even really see customers on board. Phasing in the requirements as the UFB rolls out makes a lot of sense."

InternetNZ CEO Vikram Kumar struck a similar note.

"We think that the right balance has been struck between commercial confidentiality and public disclosure based on compliance costs," he said.

"While we are generally in favour of the same rules applying to Chorus as they do to the other Local Fibre Companies, the financial structuring of the deal with Chorus means there needs to be some variations.

"At the same time, given Chorus' size and the fact that it will be using existing assets to compete in providing fibre services in the other candidate areas means that the commission must keep a close eye on the information disclosed to ensure that the competition is fair."

More equal than others
Chorus has come under-fire in some quarters for its so-called "more equal than others" contract with Crown Fibre Holdings, and refusing to say how long a free-connection promotion will last.

Enable, Northpower and especially Ultrafast Fibre – which has no copper or othe business to fall back on, or assets to sweat – have been more on the front-foot in terms of guaranteeing free or lo connection costs.

Telecommunications consultant Jonathan Brewer has pointed out that the terms of Chorus' Crown Fibre contract only require it to provide on-premise wiring 5m inside a home (to 10m for Enable, Northpower and Ultrafast Fibre) and a buried lead in of 15m (compared to 30m for the other local fibre companies).

Yesterday, Labour ICT spokeswoman Clare Curran criticised progress in the UFB roll-out, to which taxpayers are contributing $1.35 billion – $929 million in the form of interest-free loans to Chorus, and Crown Fibre Holdings buying non-voting shares in Chorus.

Mr Curran said the project was "ultra-slow" with only 1012 households connected so far.

Chorus shares [NZX:CNU] closed yesterday at $3.13.

Since its November 2011 IPO, the company has traded between $2.91 and $3.70 (see chart above).