18 Dec 2013

Call for communications certainty

6:59 am on 18 December 2013

CallPlus says the communications industry needs certainty and all players need to get together to decide on copper pricing.

Using benchmarking against other countries, the Commerce Commission has set the wholesale price of access to Chorus' copper network at $23.52 per month and the price of broadband access at $10.92 from next December. The latter is about half what Chorus is currently charging.

Chorus and other parties, including CallPlus, have asked the commission to review what it actually costs Chorus to provide copper wire services

CallPlus chief executive Mark Callander said the review could potentially take several years but that the industry needed to work together to reach a quicker conclusion.

Chorus earlier this year rejected an industry proposal to set the price of broadband access at $14 a month.

Mr Callander said the company was just as keen as Chorus for the review because it believed that would endorse significantly lower prices.

He was responding to comments last week by Chorus chair Sue Sheldon that Chorus was likely to be able to charge more after the review had been completed.

"If you look at the benchmarking that's been done in the first instance, the benchmarking is actually lower than what's been indicated," he said.

"I think if we go down the FPP (final pricing principle) path, which is a forward-looking, cost-based model on an equivalent network, I don't think you're going to see prices higher than what we've got today."

However, that would take two to three years, which created more uncertainty, Mr Callander said.

"But I wouldn't assume for a second that the FPP process is going to deliver a higher price than what they've got today, and that's supported by the fact that all players, including ourselves, have also put in for an FPP.

"We've done that because, obviously, we think the price is going to be lower."