Thursday, 07 May 2015 14:51

ISP sparks into action over NZ internet charges Featured


There has been a call for New Zealand’s Commerce Commission to justify why the country’s wholesale internet charges need to be set at levels “massively out of line” with comparable countries.

The call comes from Internet service provider Spark New Zealand as the commission enters the final stages of setting the wholesale charge for accessing the Chorus copper broadband network.

Spark – formerly Telecom New Zealand -  has launched its campaign, saying it wants to make it as easy as possible for ordinary internet users to have their say in the process. The campaign consists of a becounted website where the public can find out more information about what makes up the price of broadband. Spark also urges public submissions to the Commerce Commission asking them not to increase the Chorus monopoly charges for broadband.

Spark New Zealand Managing Director Simon Moutter says that because Chorus has a monopoly on the copper network, which 95% of New Zealanders still rely on for their landline and broadband, the Commission sets what Chorus can charge service providers, including Spark, to connect their customers to the Internet.

“Spark has 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 already pushing up the price everyone pays.

“The proposed Chorus charges are almost 80% higher per line than the median charge of comparable countries – that’s up to $180 more per year. We think that’s not on and that Chorus charges should actually be reduced.”

According to Moutter, the value in broadband plans has improved enormously in the last few years, with consumers getting more data and faster speeds at lower prices.

“What you get in a basic broadband plan today for $79 (phone and 40Gb data) would have cost $105 in December 2012, $129 five years ago, over $700 per month in 2005, and over $13,500 per month in 1999. Internet users can also get a $99 Unlimited data plan, which was not even available when the Commission started the price setting process.

“The value people are getting from their broadband plans has been increasing, the Commission shouldn’t start pushing wholesale charges back up. It needs to justify why higher internet charges are in the best interests of consumers.”

“This is important because around half of what everyone pays is the wholesale Chorus charge – so any increase has a big impact on the final price for Spark customers, and for customers of all internet service providers.”

Last December, the Commerce Commission indicated its intention to increase Chorus access charges by around $5 and, says Moutter, “refused to rule out backdating the increase”.

“As a consequence, in February this year Spark put up most plans by $4, and other internet service providers also increased prices.

“Spark has given a written undertaking to the Commission that if they decide not to backdate any increase in Chorus charges, we will pass the value of our related retail price increases back to our customers in a fair and transparent way.”

Moutter says Spark is working to give its customers more value and the Commerce Commission “needs to justify to ordinary internet users why they’re pushing charges up to levels well above comparable countries.”

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Peter Dinham

Peter Dinham - retired and is a "volunteer" writer for iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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