Chorus chief executive officer (CEO), Mark Ratcliffe, has stated the broadband infrastructure company is “100 per cent committed” to the ultra-fast broadband (UFB) and rural broadband initiative (RBI), and will engage with Crown Fibre Holdings (CFH) to maintain pace with contractual commitments.
The statement was made in response to Communications and Information Technology Minister, Amy Adams, who announced that the Government was informed by Ernst and Young Australia, via verbal briefing, that the copper price changes will have “a significant impact on Chorus’ financial position” and that absent further action will put it at risk of not meeting its agreements.
The Ministry of Business, Innovation and Employment commissioned Ernst and Young Australia to investigate Chorus’ capability to deliver on its UFB and RBI contractual commitments with the Government following the Commerce Commissions’ decisions on wholesale prices for copper-based broadband services.
“While the quantum of the shortfall is still being finalised and will be outlined in its final report (due December 12), Ernst and Young has indicated it is unlikely to alter the high-level findings, and that the Government can act with confidence on the information Ernst and Young has supplied,” Adams said.
“As a result of this information, and because the Government remains strongly committed to the UFB roll-out, the Government expects that the next step will be for Chorus to approach CFH to discuss specific provisions within the UFB contract.”
Adams said the Government supports CFH entering into discussions with Chorus to manage the issue, and expects CFH to act within the $1.35 billion UFB budget.
She also said the Government expects Chorus to meet a significant part of the shortfall, and expects to know the outcome of the discussions “in a few months’ time.”
Earlier this week, Chorus applied for a final pricing principle (FPP) review of the Commerce Commission’s pricing decision and filed for a High Court appeal of the same decision following its “regrettable but necessary” decision to withdraw its 2014 financial year dividend guidance last month.