Forsyth Barr broker Suzanne Kinnaird said under the governing regulations, Chorus was not allowed to challenge the merit result of the decision.
''All Chorus could argue was the Commerce Commission had made a mistake in its interpretation of the law. Basically, the court has said no mistake was made.
''This doesn't change our view on Chorus as I had not assumed the case would be successful.''
A cost-based review of Chorus' unbundled bitstream access (UBA) and unbundled copper local loop (UCLL) services would continue and that would define Chorus' valuation during the next 12 months, she said.
However, Ms Kinnaird expected there would be ''reasonable coverage'' of the court decision, which would cast Chorus in a negative light.
Forsyth Barr had an outperform rating on Chorus.
Chorus general counsel Vanessa Oakley said the company would review the court's findings in detail.
It was important a regulatory decision of such significance for investment in communications infrastructure, enabling better broadband for New Zealand, was reviewed by the court, she said.
The only appeal permitted in the regulatory framework was over a question of law, and not a review of the merits - as is permitted in other industries.
''We have always acknowledged the commission had significant challenges in applying the law as it stands and we remain of the view that benchmarking is an outdated methodology,'' Ms Oakley said.
The decision yesterday left the status quo in place, she said.
Chorus continued to focus on the parallel commission processes that used cost modelling for the first time to review the benchmarked prices of regulated services.
The commission recently said it was aiming to complete the price reviews by December 1.
''If the commission meets the timetable, the cost-modelled price for UBA and a new cost-modelled price for the UCLL service would apply from December 1,'' Ms Oakley said.
Forsyth Barr had increased its target price for Chorus shares by 20c to $2.10 a share and left its earnings forecasts unchanged.
The shares last traded at $1.76, down 3c.
Ms Kinnaird said the focus must now shift to the final pricing-principle process.
The commission had scheduled a workshop for May that would cover the key assumptions that would underlie the final price modelling.
''This workshop should provide indicators as to if we should expect movement in UBA or UCLL prices. Various submissions and consultation papers are due in April that may start shedding some light on the process the commission will define for actually setting a price,'' she said.
Definitions
UCLL
Unbundled copper local loop service is the metallic path facility (MPF or copper pair) that goes from a customer's home or business to the main distribution frame (MDF) in the local exchange. Internet service providers (ISPs) can deliver their own copper-based services to customers who are connected to the exchange via the Chorus local copper network.
UBA
Unbundled bitstream access is considered a key tool for opening competition in the broadband market. It enables competitors to offer their own products to consumers even if they do not operate the local loop (the last kilometre). Bitstream access allows the new entrant to use high-speed modems and other equipment provided by the incumbent and avoid maintenance and investments into the local loop.
