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Spark takes on ComCom over broadband pricing

InternetNZ has endorsed a Spark campaign calling on the Commerce Commission to justify why wholesale internet charges need to be set at levels ‘massively out of line with comparable countries’.

Spark New Zealand today launched a campaign, Becounted, and is encouraging Kiwis to have their say on the matter and send a submission to the Commerce Commission asking them not to increase the Chorus charges for broadband.

The Commission is in the final stages of setting wholesale charges for accessing the Chorus copper broadband network.

Chorus has a monopoly on the copper network, which 95% of New Zealanders rely on for their landline and broadband, and the Commerce Commission sets what Chorus can charge service providers to connect customers to the internet.

The Commission’s proposed pricing will see an increase in what Chorus can charge for access to its network of around $5. ISPs are also unsettled by uncertainly over whether those charges, when finally confirmed later this year, will be backdated.

Simon Moutter, Spark New Zealand managing director, around half of what users pay is the wholesale Chorus charge, so any increase has a big impact on the final price for customers of all internet service providers.

“The proposed Chorus charges are almost 80% higher than the median charge of comparable countries – that’s up to $180 more per year,” Moutter says.

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

Moutter says the value people are getting from broadband plans has been increasing, and argues that the Commission shouldn’t start pushing wholesale prices back up.

“It needs to justify why higher internet charges are in the best interests of consumers.”

Moutter says Spark has launched the becounted.org.nz campaign to give the public a say in what is a complex regulatory process, because the outcome will impact every internet user.

The site provides information about what makes up the price of broadband and enables users to easily send a submission to the Commerce Commission asking them not to increase the charges.

InternetNZ was quick to throw its support behind the campaign, with Jordan Carter, InternetNZ chief executive, saying Spark is raising some important questions.

“The Commerce Commission needs to set out why it wants to set regulated prices in New Zealand that are so much higher than overseas,” Carter says.

“New Zealanders have been enjoying lower prices for better plans for a number of years.

“This regulatory process risks bucking that trend and pushing prices back up,” Carter says.

“If the Commerce Commission wants to take that approach, it needs to make a clear and compelling case for why New Zealanders should pay more.”

Carter says at every stage of its regulatory process so far, the Commission has been pushing prices up in a way that isn’t supported by the evidence shared in submissions.

The internet is such an important piece of New Zealand infrastructure that it’s vital Kiwis are not paying too much for it. Any price increase Chorus is able to take, it will take, and any increase it charges to retailers will no doubt be passed on to Kiwis,” Carter says.