No appeal from Chorus or Spark on final pricing for copper network

Spark and Chorus will not lodge appeals against the Commerce Commission's final decision on pricing for access to the ageing copper network.

The network is progressively being replaced by fibre-optic cable.

Chorus was judged the winner in the competition regulator's final decision determining the price at which Chorus could offer competing telcos access to its copper network. Its share price subsequently went up and its credit rating was placed on notice for upgrade.

Spark raised its prices in response and confirmed after the Chorus announcement that it too would not appeal the outcome of a process one investor described as "a regulatory debacle" that created a rollercoaster ride for listed telecommunications companies in recent years.

"We hope all other parties accept this decision without appeals so that we can move forward as an industry," a Spark spokesman says. "We have no intention of appealing, unless someone else does, which would force us to participate in an appeal process." 

The deadline for appeals is Feb. 3.

Chorus chairman Patrick Strange says after full consideration of all facets of the final determination, the Chorus board has elected not to appeal the decision, despite disagreeing with some key elements such as the lack of backdating.

"While we are aware that some investors feel there may be merit in further testing aspects of the determination in court, it is the strong view of the board and management that the best long-term value for our shareholders and customers will be achieved through the industry focusing on bringing New Zealand better broadband.

"We do not believe this can be achieved in an environment of continued regulatory uncertainty and appeal. We hope all other industry participants also elect to put this difficult phase behind us, and focus on working together to deliver value to New Zealanders," Mr Strange says.

However, if other parties appeal, Chorus was likely cross-appeal, he says.

Chorus will now focus on the government's review of the Telecommunications Act 2001, occurring this year, in pursuit of "a more stable and predictable framework."

"We must not repeat the major market distortions of the last four years."

Spark says it's a pragmatic decision from Chorus and "we think it's the right thing to do. It's a big step closer to the industry being able to draw a line under this long-running process."

(BusinessDesk)