Chorus friendless as court rejects UBA challenge

The Commerce Commission, InternetNZ and Labour’s Clare Curran wasted little time welcoming the High Court decision to reject Chorus’ appeal against the commission’s UBA (unbundled bitstream access) decision.

InternetNZ describes the rejection as a ‘victory for common sense’ while the organisation's CEO Jordan Carter says: “Clearly the Commerce Commission knows what it’s doing and it should be left to get on and do its job. The regulatory focus in the industry now needs to be on the FPP process, which will finally set the copper broadband prices.”

At the Commerce Commission, Telecommunications Commissioner Stephen Gale says: “The cost modelling currently underway for the UBA service is our best way of promoting price certainty for Chorus and Retail Service Providers (RSPs) as soon as possible.”

Meanwhile, Labour associate IT spokesperson Clare Curran says: “Three cheers for our court system in confirming the law which gave Chorus three years to prepare for a changed copper price”.

Fewer friends in Parliament

Last year Chorus could depend on measured support from the government, but that seems to have evaporated since parliament blocked a move to overturn the Commerce Commission decision by legislation.

After this failed, Chorus appealed the decision in the High Court while asking the commission to work through full economic cost modelling of prices. The Commerce Commission based its original decision on benchmarking prices against other countries with similar market characteristics, a quick but potentially flawed approach because there are only a limited number of comparable markets.

Justice Stephen Kos turned down the appeal saying the commission did the job asked of it by Parliament. He said the appropriate response from an unhappy Chorus would be to request the more comprehensive final pricing.

A pricing sea-change

He told Chorus: “The new statutory regime was always going to drive a pricing sea-change.”

Despite Chorus’s disappointment at losing the appeal, the ruling helps clarify the regulatory landscape for broadband pricing in New Zealand. And that was overdue.

With the High Court affirming the Commerce Commission’s authority, providers will likely face increased certainty as the Full Pricing Principles (FPP) process gains momentum.

For consumers, this decision could herald fairer rates in the long term, since cost models — once fully developed — are meant to reflect the true expense of maintaining and operating the copper network. Meanwhile, Chorus will need to reassess its strategy under these constraints, potentially shifting its focus toward efficiency gains and negotiating other levers of competition if it hopes to offset the regulatory pressure on pricing.