Labour's Curran labels UBA intervention a '$100 million copper tax'

Labour communications spokesperson Clare Curran has stepped up her attack on potential government intervention in Commerce Commission copper pricing regulation, framing it as a "$100 million copper tax."

Curran criticises Chorus for asking government for a $100 million bailout to rollout the UFB network while posting a healthy $171 million net profit for 2013.

She says Communications Minister Amy Adams' decision to price copper broadband the same as fibre amounts to giving the company a $100 million copper tax.

Concerns about 'pocket pricing'

Curran says it's even more extraordinary that Chorus will be allowed to use competitive copper pricing in the areas where it doesn't control the fibre rollout.

She says: "In other words Chorus can undercut the three smaller taxpayer-supported UFB companies in Northland, the mid-North Island and Canterbury in order to protect its own business. This is called pocket pricing; it is an extraordinary rort."

Background

The controversy stems from concerns raised earlier this year that Commerce Commission cuts to unbundled bitstream access (UBA) prices—the wholesale charges for copper network access—could threaten Chorus's ability to finance the UFB rollout.

Prime Minister John Key has indicated the government may intervene to prevent UBA price cuts, drawing criticism from opposition parties and consumer advocates who argue this would amount to a taxpayer-funded bailout for Chorus shareholders.

Curran's "copper tax" framing would prove influential in shaping public opposition to government intervention, with a broad industry and consumer coalition adopting the term two weeks later.