Monday 17th March 2014
|Text too small?|
The Commerce Commission narrowed down its modelling to set the regulated price of Chorus's copper lines without any evidential backing and didn't account for a section of the act designed to minimise the risk to investors in telecommunications services, the High Court heard today.
The regulator erred in law when setting the price Chorus can charge for access to its unbundled bitstream access services in that it didn't have any evidential basis to narrow its inquiry and ignored a section of the legislation aiming to support the government's aims in building a nationwide fibre network, counsel for Chorus, David Goddard QC, told Justice Stephen Kos in the High Court in Wellington.
Goddard said the warning signals should have started sounding when the number of countries the commission was using as a benchmark to set the initial price was whittled down to two nations, Sweden and Denmark. At that stage the commission should have considered section 18 of the act, which was designed to protect innovation and investment in the sector.
"The whole point of section 18 is it tells you how to approach uncertainty, it tells you not to risk innovation and investment," Goddard said.
The regulator didn't have a sound reason for limiting its benchmark price range without taking in other factors, or the legislative requirement to support investment, he said.
Chorus is appealing the commission's final determination in November last year setting the UBA monthly price at $34.44 per line, up from the $32.35 price initially mulled in his draft decision, with the additional UBA component accounting for $10.92 and the unbundled copper local loop accounting for $23.52.
The court heard a cross-appeal by Orcon and the consumer agencies was dropped. The Commerce Commission will put forward its argument after Chorus, followed by Vodafone New Zealand, Orcon, and finally by Telecom.
The judge-alone hearing is set down for four days and is continuing.
No comments yet
Freightways' net profit rises despite NZ slowdown
National floats company tax cut, recommits to higher pension age
Metlifecare lifts underlying annual net profit 4%
Chorus CEO McKenzie to leave this year as operating earnings decline as expected
Supreme Court to hold oral hearing on Synlait's Pokeno appeal
Meridian posts record profit on high production, prices
Intuit on track to overtake Xero outside the US
Fasten seatbelts for the Trump twitter-storm fallout
Analysts pan Fletcher results, one comparing it to Fonterra
Lower yield and marketing efforts to flatline Delegat profits