23 May 2014

Delay to cost $12m a month - Chorus

7:04 am on 23 May 2014

Chorus believes the Commerce Commission's delay in its final decision on the price of broadband services over copper wires will cost the company $12 million a month.

The commission is currently reviewing its original decision that Chorus must halve its charges to deliver broadband services over the copper wire network, as well as make drastic cuts to its charges for using those wires for voice services, from 1 December.

The regulator had initially aimed to have it done and the new prices in place by that date. However, it is now planning to have a draft decision by 1 December, with a final decision due by 1 April.

Chorus chief executive Mark Ratcliffe said it was only a few weeks since the corporate regulator promised its final decision would come before 1 December.

He rejected the idea that Chorus was partly responsible for the delay because it had requested extra consultation.

"I don't think that's necessarily true. I think we have said that there are things that need to be consulted on. I don't know whether those are extra things," Mr Ratcliffe said.

"We think the timetable was achievable but clearly nobody else did and have lobbied successfully to get it extended.

"I guess a cynical thing would say that every one of the commission's timetables always gets blown up, and it's been seen again that this one gets delayed by four or five months."

Mr Ratcliffe said he believed, based on precedent, that the final decision would be backdated.

"We've seen recent examples of things getting backdated, where price reductions are there, and we've honoured those things.

"Backdating makes sense and one would assume that people who are the beneficiary of a short-term reduction in costs would think that in."

Telecommunications Commissioner Stephen Gale said he had to make a trade-off between the need for certainty as soon as possible and allowing sufficient consultation.

No decision had been made on whether any price change would be backdated but it was on the table.

"If our decisions change then there's a debate yet to be had about whether we would backdate," he said.

"It really will come down to a judgement about how good that is for competition in the sector."

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