Anger at secret copper telecomms deal

Organisations representing consumer and users interests jointly condemn possible secret price deal. Consumer, InternetNZ and Tuanz, the Telecommunications Users Association, say they fear Chorus may have secretly negotiated the price telcos pay to connect customers to the copper broadband network in a behind closed doors deal.

The groups point to a Tom Pullar-Strecker story in The Dominion Post which says the industry have agreed on the regulated price of wholesale copper broadband connections. Pullar-Strecker writes that the Telecommunications Carriers Forum brokered the deal:

“It is understood all major telecommunications retailers agreed on the compromise price and Communications Minister Amy Adams, who would have had to regulate it over the head of the Commerce Commission, was informed.”

Chorus has monopoly control of the copper network. Until now It has been the Commerce Commission’s job to regulate prices based on certain rules. This responsibility is laid out in the 2011 amendments to the Telecommunications Act.

When the Commerce Commission announced its regulated price, Chorus went on the offensive claiming the lower price would cost the company $160 million and hinder take up of the government-supported UFB fibre network it is rolling out.   A deal between telcos and Chorus would be politically expedient for the government, but would also undermine the role of the Commerce Commission. In a statement Consumer, InternetNZ and Tuanz say:

These kinds of back room deals are rarely good for consumers and it puts us in the awful position of the industry sitting down together to set pricing without reference to either customers or to the regulator

It’s possible this kind of deal may cause New Zealand trouble with trading partners and international treaties. See Get secret pricing deals off the table – Consumer, InternetNZ, Tuanz