What Chorus and the Govt knew

Posted by Clare Curran on November 11th, 2013

The debacle surrounding the government’s flagship ultrafast broadband programme and the roll out by Chorus rumbles on. The government’s heavy-handed response to a well-signalled decision by the Commerce Commission to review and drop the price of copper broadband has resulted in a year of uncertainty for the telco industry and turmoil for the future of the fibre scheme.

Both the government and Chorus have insisted they had no idea that the Commerce Commission would decide that copper prices should fall following a review based on international benchmarking on a cost-plus basis, despite this being what the legislation written by former Minister Steven Joyce told them to do (Section 78 page 100).

In this post I have provided two pieces of evidence that both the government and Chorus knew very well back in 2011 what would happen with copper prices, even if they didn’t know what the end price determination would be. The disingenuity of both players around this is staggering and has led to speculation that there was some kind of backroom guarantee to Chorus from the government via the Ministry that “she’ll be right”.

Clearly “she’s not right”. And the only place the finger can be pointed is back to Steven Joyce, the original architect of the legislation which demerged Telecom to create Chorus, which was then handed the UFB contract on a plate. It was Joyce’s legislation and his contract. And as should be clear below, both the government and Chorus knew what the deal was with copper pricing.

To read the rest of this post click on the link below
http://blog.labour.org.nz/2013/11/11/what-chorus-and-the-govt-knew/

ENDS

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