Re-benchmarking prices for Chorus’s unbundled copper local loop service

On 30 June 2011 the Telecommunications (TSO, Broadband, and Other Matters) Amendment Act 2011 (the Amendment Act) received Royal Assent.  Sub-sections 73(1) and 73(2)(b) of the Amendment Act require that the Commission review Decisions 609, 611 and 672 under section 30R of the Act.  The purpose of the reviews was to average the core prices paid under these Decisions (in contrast to the current prices, which are geographically de-averaged).

On 25 August 2011 the Commission announced that a complementary review of the benchmark set for UCLL was being started. The review would update the monthly UCLL prices and UCLL connection charges to reflect movements in prices internationally, and update prices under the UCLL and Sub-loop Services STDs that are affected by the UCLL benchmark data update. 

On 24 November 2011 the Commission released its final decision. In that decision the Commission:

• Averaged the current de-averaged UCLL prices.
• set the naked UBA uplift by reference to the geographically averaged UCLL price contained in the UCLL STD.
• Provided a longer timeframe for the benchmarking of UCLL prices.

This project continues the UCLL benchmarking work. This review will:

• Update the urban and non-urban UCLL monthly prices
• Update the average UCLL price applicable 3 years after separation
• Update the UCLL connection charges
• Update the UCLL uplift for naked UBA
• Update the price for the UCLFS service
• Update the price for the UCLL sub-loop service.

Recently, Brian Gaynor, Executive Director of Milford Asset Management, wrote an opinion piece in the New Zealand Herald relating to the release of the revised draft decision re-benchmarking the wholesale price for the unbundled copper local loop service (UCLL). Dr Ross Patterson has replied to Mr Gaynor and a copy of this letter is below.