ComCom delays decision on prices for UBA and UCLL

The Commerce Commission (ComCom) has extended its timetable for determining wholesale prices under the final pricing principle (FPP) for both the unbundled bitstream access (UBA) and unbundled copper local loop (UCLL).

ComCom is now aiming for a draft decision on both prices by 1 December 2014, and a final decision by 1 April 2015.

ComCom’s original intension in March this year was to produce a draft determination by August and complete a final decision by 1 December 2014. It has decided to change that time frame to allow for matters raised in the submissions from Chorus, Telecom, Vodafone, Callplus, Orcon and Internet NZ.

According to ComCom, the telco retailers have all expressed serious concerns in their submissions about their ability to engage effectively on the technical complexities of the FPPs if consultation were confined to the period after a draft determination.

“We take the industry’s concerns seriously and believe that the benefits of ensuring effective industry input outweigh any extended period of uncertainty,” said telecommunications commissioner, Stephen Gale.

“We have decided to allow more time. We will be releasing an additional consultation paper in early July with the Commission’s preliminary decisions on a number of modelling and conceptual topics.”

Even as the Commission stated that Chorus had asked for the body to consult on preliminary decisions, the latter put out a statement in response to ComCom’s decision, expressing disappointment over the delay.

"While we acknowledge the FPP processes are challenging, we are very disappointed that the timetabling aims announced by the Commission in February have now been changed,” said Vanessa Oakley, Chorus general counsel. “We agreed with the Commission's statements in March that prompt completion of those processes provided the best certainty for everyone.”

“We also believed that appropriate levels of consultation could be undertaken within the original timeframe.

“The implementation difficulties with benchmarking are well known. The High Court has described it as a "quick and cheap" methodology. The Act says benchmarked prices can be reviewed by TSLRIC cost modelling."

Chorus stated that the delays mean that the UCLL and UBA benchmarked prices will both be in the market from 1 December 2014 because the cost modelling hasn't been completed.

“We note that the Commission does not have the option to take more time to complete cost modelling processes but also hold the benchmarking prices from coming into effect until it completes them. However it can backdate, and has in a recent decision.

"Uncertainty increases for everyone today. Unpredictability on process and outcomes remains a challenge for Chorus and our retail service provider RSP customers,” she said

Applications for the FPP processes were made in February 2013 and December 2013 for UCLL and UBA respectively