Labour communications spokesperson Clare Curran says there are two flaws in Ernst & Young report into the financial state of Chorus.
Communications Minister Amy Adams commissioned Ernst & Young Australia to investigate how the Commerce Commission ordered price cuts to the network operator’s copper lines changed Chorus’ finances.
The report concludes Chorus is not in danger of bankruptcy, the company can make changes to reduce the shortfall caused by the lower copper price and that the contract does not need to be renegotiated.
Curran warns this still leaves Chorus able to “work to rule” a practice that could, effectively, bring New Zealand’s communications to a grinding halt.
She highlights what she describes as two flaws in the Ernst & Young report.
First Curran says there are indications the report writers depended on information supplied by Chorus “without significant verification, even though the terms of reference required them to.”
She also says they fails to take the combined impact of price cuts to unbundled copper local loop and unbundled bitstream access services into account.
Curran says: “According to our information the impact of both prices could be that the copper price will rebalance to be around what it is today. The issue is the time lag in getting there and the impact on the industry”.