Sparking up over broadband charges

Spark managing director Simon Moutter is calling on the Commerce Commission to justify increasing...
Spark managing director Simon Moutter is calling on the Commerce Commission to justify increasing wholesale internet charges. Photo supplied.
Spark wants the Commerce Commission to justify itself over wholesale internet charges and has not held back at giving its former stablemate, Chorus, a serve about its proposed charges.

Spark and Chorus were once part of Telecom but are now separate entities, forced apart by regulation.

Spark managing director Simon Moutter wants the commission to explain why New Zealand's wholesale internet charges need to be set at levels ''massively'' out of line with comparable countries.

Because Chorus had a monopoly on the copper network, on which 95% of New Zealanders still relied for their landline and broadband, the commission set what Chorus could charge service providers - including Spark - to connect their customers to the internet.

Mr Moutter said Spark had been working to give customers more value in their broadband plans.

''However, the Commerce Commission is proposing to increase what Chorus can charge to access their network, which is simply pushing up the price everyone pays.''

The proposed charges were nearly 80% higher per line than the median charge of comparable countries - about $180 per year, he said.

Spark believed Chorus charges should be reduced.

The telecommunications company is hoping to get public support for its case by launching a website www.becounted. org.nz where people can find out more about what made up the price of broadband and send a submission to the commission asking it not to increase the Chorus monopoly charges for broadband.

Mr Moutter said the value in broadband plans had improved hugely in the past few years.

Consumers were getting more data and faster at lower prices.

A basic broadband plan today for $79 (phone and 40GB of data) would have cost $105 in December 2012, $129 five years ago, more than $700 a month in 2005 and more than $13,500 in 1999.

Internet users could also get a $99 unlimited data plan, which was unavailable when the commission started the price-setting process.

The value people were getting from their broadband plans had been increasing and the commission should not start pushing wholesale charges back up, he said.

The commission needed to justify why higher internet charges were in the best interests of consumers.

Half of what everyone paid was the wholesale Chorus charge. Any increase had a big impact on the final price for customers of all internet service providers, Mr Moutter said.

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