Telco rule review brought forward - Stuff

Chorus shares have jumped 10 per cent after Communications Minister Amy Adams bowed to pressure from the company and brought forward a comprehensive review of telecommunications regulation.

The move is a major victory for Chorus which this week requested policy changes as it battles a Commerce Commission draft determination that would slash the price it could charge for the use of its copper-based broadband network.

The Government amended the Telecommunications Act in 2011 as part of its preparations for its $1.35 billion investment in ultrafast broadband, saying then that it would commence "a general review of the policy framework for regulating telecommunications services in New Zealand" by September 2016 with the goal of completing the review by March 2019.

But Adams today announced the review, and another that will look at the Telecommunications Service Obligation that limits fixed-line rentals and guarantees unmetered local calling, would now start "immediately".

Former Communications Minister Steven Joyce had indicated copper-based broadband would act as a competitive check on the price telecommunications retailers would be able to charge for fibre-based ultrafast broadband.

But Adams signalled the review would result in a more fibre-friendly regulatory regime.

"Throughout the establishment of the Government's UFB and RBI [rural broadband] initiatives, user groups were clear in their calls for the need for fibre connectivity as a priority. The Government is committed to world-class fibre infrastructure, and the long-term gains it will bring," she said.

"Increased certainty around the transition path from copper to fibre will promote development of retail fibre products, boosting the ability of New Zealand homes, businesses, schools and hospitals to maximise the transformative potential of these technologies.

"The policy framework needs to be predictable and stable for all concerned, and in my view, it is therefore desirable that these two reviews get underway immediately."

The battle over telco regulation came to a head after the Commerce Commission issued a draft determination in November that recommended cutting the price Chorus should be allowed to charge for wholesale copper broadband connections by $12.53 a month to $8.93 from December 2014.

Chorus estimated the price cut would slash up to $160 million off its annual earnings before interest, tax, depreciation and amortisation and said it would inhibit the take-up of ultrafast broadband by making existing copper services cheaper in comparison.

Chorus shares are trading up 29 cents at $3.15.

- ? Fairfax NZ News

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Source: http://www.stuff.co.nz/business/industries/8278183/Telco-rule-review-brought-forward

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