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Spark to ComCom: End deafening silence and front up

Spark New Zealand has launched another attack on the Commerce Commission, calling for the regulator to end its ‘deafening silence’ and front up on proposed increased wholesale landline charges, saying the charges are forcing Kiwis to pay for the same infrastructure twice.

The Commission is in the final stages of seeting wholesale charges for accessing the Chorus copper broadband network, which 95% of Kiwis rely on for their landline and broadband. The proposed pricing will see an increase of around $5 to what Chorus can charge for access to its network.

More than 3000 people have now made a submission, via Spark's Becounted campaign, calling on the Commission to reduce wholesale landline charges, rather than increasing them.

Spark, which launched BeCounted 14 days ago, says the campaign, which provides an easy way to make submissions opposing the Commerce Commission’s proposed copper landline wholesale charges, has attracted more action than anticipated.

Simon Moutter, Spark New Zealand managing director, says the volume of engagement, on a complex process that would typically only involve a few dozen submissions, shows that many New Zealand consumers care deeply about where the cost of their broadband is heading and the outcome of the process.

“Yet there is a deafening silence from the Commerce Commission,” Moutter says.

“The Commission needs to front up to New Zealanders and explain why it wants to set Chorus wholesale charges at levels massively out of line with comparable countries – because these charges account for around half of what every New Zealander pays each month for their broadband and landline,” Moutter says.

“The Commission’s model is asking New Zealanders to pay for the same infrastructure twice. It is applying a replacement cost to all of Chorus’ assets even though Chorus will never have to replace many of those assets as they will be overbuilt in three-quarters of the country, by the UFB rollout – and Chorus is already getting $1 billion from the Government for its share of the UFB build.”

Spark says the proposed Chorus charges are almost 80% higher per line than the median charge of comparable countries – or up to $180 more per year.

“We think that’s not on and that Chorus charges should actually be reduced,” Moutter says.

“The Commission should publically explain to consumers why it is in New Zealand’s interest to set wholesale internet charges so much higher than the rest of the world.”

Recent figures from Spark show average monthly data use per household for Spark broadband customers has grown 29% in three months, from 42.5GB in February to 55GB in April, with the average New Zealand house now using about as much data in a year as the whole of New Zealand used in a month in the late 90s.

The Commerce Commission is due to release an interim decision in June and confirm the charges in December.