Spark submission proves copper confusion

Spark’s submission to the Commerce Commission has shown that there is still considerable confusion over the right way out of this copper pricing situation.

The very presence of such a thorough alternative interpretation of the data shows that there are a number of complex moving parts. This means that getting it right is far harder than getting it done quickly.

Consumer groups and the majority of the telecommunications industry have been saying that the Commission’s modelling was hasty and that speed could lead to errors. Spark's submission supports that argument.

Spark’s third-party data argues that the modelling may have overestimated the costs of providing broadband by 60 - 80%, and would make New Zealand one of the most expensive places in the world to get online.

The graph in the submission demonstrates that Chorus’ charges compare unfavourably to similar overseas examples - the differences cannot be explained away by saying New Zealand is different – it’s not that different.

InternetNZ Chief Executive Jordan Carter says that the Commerce Commission is in an unenviable position.

“On the one hand, the Commission is required to act in the best interest of users while also attempting to provide regulatory certainty to investors. This latter requirement means it has produced highly complex analysis quickly. We have consistently said consumers’ best interests would be served by the Commission taking the time to get it right first time.”

“Spark has also raised the issue of backdating of any price change. We have long said that there should be no backdating as it creates massive uncertainty for everyone - industry and consumers alike. We are pleased that Spark has responded to our calls for industry players to refund any future charges they have had to apply because of contingencies for backdating,” said Mr Carter.

ENDS

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