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Commerce Commission shelves investigation into new Chorus services

Thursday 16th October 2014

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The Commerce Commission has suspended an investigation into Chorus's proposed Boost variant services after the telecommunications network operator put plans to constrain regulated services on hold.

Earlier this month Chorus announced a number of changes to its proposed variant services, including tweaks to regulated unbundled bitstream access (UBA) services, and Spark New Zealand, the network operator's biggest customer, yesterday withdrew its complaint about the proposals, the regulator said in a statement. As a result, the commission has puts its investigation into the proposed services on hold.

"We consider it important that the regulated services be properly maintained and not actively eroded," Telecommunications Commissioner Stephen Gale said. "Chorus's decision to put on hold its plans to constrain the regulated service appears to be a good outcome for the industry and end-users."

The commission was considering the extent to which the new variant services would complement or substitute existing regulated UBA services, what investment they would need, and whether the changes are consistent with the Telecommunications Act. Spark, formerly Telecom Corp, and CallPlus raised concerns over the legality of Chorus's plans, and a legal opinion commissioned by the regulator took the view that the proposals probably breached the rules.

In a separate statement, Chorus general counsel Vanessa Oakley welcomed the suspension to the probe, and said the company "always sought to work constructively with the industry, and this has included extensive consultation with customers and the commission on a number of proposals in advance of making any changes."

The network operator will continue to make its VDSL service available and will introduce Boost VDSL from Dec. 1, which it views as materially different from the regulated service, and has put the Boost HD service on hold, according to an Oct. 3 cross-submission on the regulator's investigation.

Shares of Chorus rose 0.8 percent to $1.89 yesterday, and have gained 31 percent this year, after being punished in 2013 during the height of regulator uncertainty.


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