Copper Tax proposal heads to court

Media Release
November 7, 2013

Copper Tax proposal heads to court

CallPlus Limited has filed proceedings in the High Court in Wellington seeking a judicial review and declaratory judgment that the Government’s review of the Telecommunications Act 2001 does not comply with section 157AA of the Act and therefore cannot proceed.

Section 157AA of the Act requires the Government to commence a review of the policy framework for telecommunications regulation by the end of September 2016.
Section 157AA(3)(b) requires the minister to take into account ten factors, including:

1. the extent of network coverage of services provided on fibre, copper, wireless, and other telecommunications networks; and
2. the level of investment in fibre, copper, wireless, and other telecommunications networks, and the ability of access providers to recover that investment within a reasonable period; and
3. the ability of access providers to achieve, within a reasonable period, reasonable rates of return on their investment in telecommunications networks that adequately reflect the risks assumed by those access providers when the relevant investments were made; and
4. the level of competition in relevant telecommunications markets; and
5. the effects of the regulatory framework under this Act on investment in fibre, copper, wireless, and other telecommunications networks, and on outcomes for end-users; and
6. the sustainability of the regulatory framework under this Act, given developments in technology and convergence of traditional telecommunications markets; and
7. the importance of any regulatory intervention being proportionate, having regard to the problems being addressed, the size of the relevant market, and the number and size of the potentially regulated entities; and
8. developments in wireless solutions and whether they should be part of any telecommunications regulation; and
9. experience in comparable jurisdictions and economic relations with Australia, weighed against what is appropriate for New Zealand conditions and the make-up and history of New Zealand's telecommunications markets; and
10. any other matters that the Minister considers relevant.

The discussion document has only dealt with the pricing of Chorus’s copper broadband and voice services network. It has failed to address any of the matters mandated under 157AA(3)(b) of the Act which should be a critical part of the review process.

“We have some concerns that the Government has not taken into account a number of factors that will have a material impact on the competitive market and most importantly our customers. The Government should stop the consultation process as it would be wrong to launch major new policy initiatives or legislation until this matter has been reviewed“ says Mark Callander, CEO of CallPlus.

ENDS

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