So now the regulator, rightly, has ruled that the copper has become overpriced at wholesale level, and the tariffs should be reduced to the benefit of retail service providers and hopefully, consumers. The government’s problem is this will widen the gap between the retail price of old copper and new fibre, making the fibre harder to sell.

The solution is not to maintain the wholesale price artificially high. This would undermine the regulator and effectively deliver an early Christmas to Chorus shareholders.

Perhaps the pragmatic answer is for the governbment to allow the regulator’s ruling to stand, but legislate to claw back part of the savings as a levy and add this to the proceeds into its fibre investment. There is probably scope to do this under the Telecommunications Act. That would be a win/win – Chorus would still get a fair price for copper as calculated by the Regulator, consumers would see their current price unchanged but benefit from faster roll out of fibre, the government would get the ratio between copper and fibre prices remains unchanged so as to maintain fibre’s marketability, and the regulator’s independence would be preserved.

Why not? Time for creative thinking.

1. Should the govt artificially hold up minimum prices for copper, thereby allowing wholesale companies to make excess profits? No.

2. If the govt wants a successful fibre broadband, will it have to subsidise the entry costs of commercial players so that they can make a reasonable dollar out of it? Probably, but that should be a direct and transparent subsidy, not a really inefficient minimum price that gives excess profits to commercial entities that may or may not be involved in the fibre rollout.

If UFB roll out is gonna happen its gonna require dollars. the fairies wont provide UFB despite what the Socialist Party Green Party et al think.

If I and others are gonna pony up the dollars we expect a return on our dollars. We aint an ATM machine for those wanting UFB.

So either CC allows our company to charge prices that reflect the investment and allow an appropraite return on capital to we the owners of the company or we will take our dollars and go elsewhere.

And guess what morons, No UFB or a very much more expensive UFB than we the owners of Chorus will provide you with

Your choice.

Car analogy: Flash new model comes out, but isn’t selling as well as dealers had hoped, so they get govt to tax everyone driving other cars in an attempt to make the new one look like a bargain. Oh, except you can only drive this new car in the major centres, and only in the nicer suburbs.

There. Fixed that for ya.

One of these days tens of thousands of sleepy hobbits will wake up. It will be too late then.

Lower prices are definitely a good thing, to the extent that those lower prices are driven by technological and productivity improvements. Lower prices driven entirely by removing profit from the system are not necessarily so attractive.

And then we can all work for less. And shareholders can earn less. And the government earns less in taxes.

“The wreckless pursuit of poverty” springs to mind!