Careful fish been there done that, retirement fund minus 100k
Printable View
Careful fish been there done that, retirement fund minus 100k
RSI is very low (under 10) and looks to be about to climb. Sp currently trading at 1.86. Trading at 1.87 will give a higher high than yesterday, and provided that today's low does not drift below 180, this would confirm a buy signal for some traders.
Next resistance is at 1.95 and 2.10.
BC
To foretell the future you need to know what the Ernest & Young report in December is going to say and what the Government is going to do about it not what some idiot RSI/TA line is going to do.
Some intelligent speculation on this report and some regular scanning of leaky blogs like Whaleoil rather than reading tarot card TA stuff.
What happens won't be affected by popular opinion, or by sales, volume and price trends but by what is in the report and what the opinion in the National Party caucus is.
My belief is that the ernest and young report will be totally independent as its mandate.
It must come to a conclusion that comparative country pricing cannot account for all the factors that must be taken into account to enable fair pricing.
It would be in the interests of all to arrive at a fair price by negotiation and certainly in the best interests of chorus and national to reach a settlement before the election.
Cunliffe is a loose bigmouth cannon who wont be trusted by chorus.
National might gain a few votes if it negotiates a reduction on todays copper prices
Touchy, touchy Major von T. It sounds like you might still be holding(?).
I put it to you that until such a time that the report is published, technical analysis of the day to day demand & supply pressures on this stock is useful. It doesn't provide certainty of course (what does) but can help to identify pivots and momentum...which some of us find quite handy when trading.
I agree that a) fundamentals should not be ignored, nor b) major announcements that swing momentum...but TA does have a place.
Today's volume is substantial (~3m shares) and this stock traded higher with both a higher low and a higher high. This is a buy signal that some traders use to make money, and chances are (notwithstanding DJIA/S&P500 swings, etc) that this bodes well for curent holders of the stock tomorrow. If I were holding (which I'm not) tomorrow would not be a day that I'd sell, and my opinion is based on widely used and proven technical analysis...not tarot. You of course are entitled to an alternative opinion but I suggest that you don't ignore the charts. You may do so at your peril (e.g. see the RYM thread).
BC
Dear fish
The E&Y report is into the finances of CNU and it's options and ability to cope with the reduced income only and is due this side of Christmas.
It will not cover the ComCom pricing decision at all.
That review/reworking as requested by CNU and using different criteria is not due for over a year.
Best Wishes
Paper Tiger
Thanks for that correction PT.
I was hoping that if they found that the fibre broadband roll out was at risk because under the com com decision copper would be cheaper and fast enough with vdsl for most users that they might advise a fairer pricing system .
Do you know if the reworking requested by telecom is underway and is com com responsible for doing it?.
I
Chorus have just announced that they are issuing more shares to Crown Fibre Holdings.
I am puzzled - where do these extra shares come from?
My, obviously faulty, thinking is:
- A company lists with 100 shares at $1 each.
- If a shareholder buys 5 shares they do so in the knowledge that they then own 5% of the company
- If the shares go up or down in value the shareholder still own 5% of the company
- If a Rights issue happens then the shareholder has a choice of taking up the Rights (thus retaining their 5% stake) or not taking them up thus reducing their percentage ownership (say to 4%)
- Takeovers happen when one shareholder goes out and buys some of the other shareholders' shares and then uses their percentage for a compulsory purchase of the remaining shares
But if extra shares suddenly "appear" and get sold to others then the Shareholder's percentage immediately reduces and the shares - and % of dividends - are worth less to boot.
????? Can anyone explain this to me in language I can understand???
These shares being issued are not ordinary CNU shares, they are CFH securities. It is all part of the original plan that the Govt would fund the roll-out by purchasing these shares. They are preferential in terms of repayment but have no dividend until 2025 and no voting rights. See the annual report pg 17 for more detail
http://www.chorus.co.nz/file/17479/C...2013-FINAL.pdf
NBR reports a big talking Aussie fund manager is going to put the govt on notice
I say just sell the shares that you are obviously underwater on and be a man .....no point blaming others for not understanding the risks . If he can't stand the heat go somewhere else.
Mind you I didn't read the whole story why he really pissed off
Thank you. I'm quite relieved that my current 0.0003% ownership of the company will not be reduced further :)
The timing of the announcement made me think it was a Government bail out.
Normally would the issue of other types of securities affect the price of the normal shares?
And also, some years ago, before I was paying too much attention to shares, AIR dropped like a stone and the Government stepped in with a bail out and added significantly to their share holding. From memory the shares had dropped to something like 10c. How did they do this? Did they buy up lots of shares or was it done through something like a Rights issue?
The BNZ bailout was another one. Could they do it again with CNU?
IT would depend on the nature of the securities. This issue of CFH securities was fully outlined though so presumably it would have all been taken into account by the market.
See the AIR thread for some info about the govt bailout. I discussed it a little in there somewhere. You'll have to do your own research for BNZ.
They can bail out CNU but would get lots of flak re corporate welfare.
http://www.nzherald.co.nz/business/n...ectid=11164287
Is the end of the 'government intervention' possibility? i.e. is Chorus now officially screwed?
'I've been thinking (probably dangerous thinking). On the 5/12 there are a few outcomes, I can't think of every possible one. But most of them lead to a favorable outcome...
CNU can afford 5-7% div yield. - SP goes up.
CNU is screwed - GOVT prop it up - SP goes up.
CNU can shouldn't pay a div - already reflected in SP? - future network monopoly. SP growth and div return in future
And a bad option - CNU defaults on contract conditions and lose the roll out!
At the end of the day the GOVT can't let 75% of the broadband roll out fall over. At the moment the SP would have to be close to be considered most of the bad outcomes. Because of this I'm thinking I should buy a little more or am i way off?
@ years of uncertainty ahead where the 'cooper tax' will now be received by the retailer, not chorus.
Hopefully Chorus will now slow down its roll out and target higher demographic areas that are more willing to pay for a better qualify product as it seems clear that all that most people want is cheaper cooper.
- Henry Ford (maybe. No proof he actually said this)Quote:
If I had asked people what they wanted, they would have said faster horses
I'm just so glad I learned from my mistakes from the past and sold CNU at $2 at a decent loss because when factors outside the company's control started to creep in it's time to leave.
Yes surfersteve this is a sad day for NZ. Go to Asia or Europe and it is painful to come back to our pathetically slow internet in NZ and is leaving us out of taking full advantage of technology going ahead in leaps and bounds.
Companies will now not consider NZ for any business reliant on good internet speeds, which is basically 90% of all businesses. How pathetic. Obviously Chorus is no longer investment grade based on this news !
What chance has NZ got to keep up with the World and sadly the Maori political leaders are the worst, hellbent on making sure the majority of their constituents stay firmly in the underclass as can be seen by this from the Herald:
""The Maori Party is keenly aware of the digital divide within New Zealand, as reported by the World Internet Project last week.
We do not support further entrenching that divide by increasing the cost of copper broadband and voice services above the price set by the Commerce Commission", Maori Party Co-Leader Tariana Turia said.
NZ First Deputy Leader Tracey Martin said Kiwi families would end up paying more than they should for their internet "in another shonky deal crafted by the Government" if the commission's recommendation was overturned.
"We will vote against any legislation that seeks to overrule the Commerce Commission's final pricing recommendation or that tries to delay its implementation."
The Green Party and Mana Party Leader Hone Harawira also underlined their opposition to Government intervention on copper prices.
Mr Harawira said a quarter of Kiwis would never have access to the new UFB fibre network Chorus was helping build.
"We're not voting for any Bill that tries to make people who will never have UFB pay for it to be put into homes in Remuera.''
Why can't Chorus make a decent profit at $34.00 a month? BT in the UK charge around $170 a year for copper line access and even that's about to be cut. And BT make a hefty profit.
Perhaps Chorus should get their arse into gear, become more efficient and cut costs.
http://www.telegraph.co.uk/finance/n...-millions.html
Interesting little article BlackCross, thanks.
For a ball-park comparison, let's say the land area of NZ and Great Britain is the same.
After a 12% discount on the current UK rate quoted and assuminng that today's exchange rate is a sensible long-term average, let's say that is NZD131 per year.
The population of Great Britain is around 60 million; NZ around 4.5 million, a ratio of about 13:1.
So sharing the love around the population, that makes 13 x 131 = NZD1,703 per year, or NZD142 per month.
Though these calculations are useless in terms of calculating a fair price*, they make me think that FPP is the sensible next step.
Any figure the government might impose (if it could) is likely to be lower than the FPP outcome anyway, so all this political nonsense seems to be serving only, well, political purposes.
It's a shame we will have to wait so long for a decision having such a fundamental influence on our country's future.
*not that this has prevented others using similarly bizarre logic for all sorts of things
http://www.nzherald.co.nz/nz/news/ar...ectid=11164427
http://www.nbr.co.nz/opinion/nz-firs...rus-copper-tax
It is not the end of the world - could be the end of Chorus as we know the company, but not end of the UFB etc.
Simply means someone else may end up rolling out the UFB.
Excerpt :
"If there is a problem with Chorus's costings around the UFB rollout, then that needs to be addressed.
What should not happen, and today's round of releases would suggest I'm not alone in thinking this, is that the government be allowed to overrule the independent regulator on a matter that's been expected for three years.
What were Chorus management and sharemarket analysts doing when the prospectus came out? Did they not see the minister's gift of a three-year delay (a regulatory holiday) as proof that the drop would be significant, because the rest of the industry certainly did.
The next step is to identify whether there is a problem or not. If there is, how best to address that problem.
If Chorus's spending is so out of control (currently $3000 per premise passed when it should be about $1200-$1500) then something needs to happen.
Several options present themselves:
1: Re-tender the Chorus work. Vector bid for the work - perhaps they've had time to assess whether they can sharpen their pencil and do it for less than Chorus.
2: Direct injection of cash into Chorus. This would fly in the face of
Chorus's contract with the Crown which says that shouldn't happen, but if the govt decides to go down that track I'd expect to see some very significant caveats put on the use of that money.
3: Direct govt control of Chorus in exchange for bailing it out. Ultimately, if we're to spend this much money on one company, we should own it. A single open access provider for the national telecommunications market could radically change the way telecommunications works in this country.
(the alternate version of this is to do nothing, let Chorus go broke, buy the assets for a song, build a national open access network.)
4: Get one of the LFCs to run Chorus's UFB project. The LFCs are proving they can build networks faster and more cost effectively - put one of them in charge.
There are plenty of options out there that don't involve overriding the regulator, messing up the rest of the industry and sending the wrong signals about independence to the investment community."
Thats interesting. Where I live they have been digging and putting in cables etc for what I presume is this UFB rollout. What I did note was the large number of employees involved in a huge amount of nothing for much of the time. A lot of workmen walking around, talking, playing with cell phones and generally not doing much. No wonder the spending is out of control. They could do what needs to be done with half the amount of people.
Thats interesting. Where I live they have been digging and putting in cables etc for what I presume is this UFB rollout. What I did note was the large number of employees involved in a huge amount of nothing for much of the time. A lot of workmen walking around, talking, playing with cell phones and generally not doing much. No wonder the spending is out of control. They could do what needs to be done with half the amount of people.
Very good friend of mine shifted house recently.
It took Chorus 5 days to connect his internet, and that is after increasingly frantic daily calls by him to Telecom.
Telecom in turn sounded frustrated at its inability to get Chorus to shift its arse to connect what is now an essential service like water and electricity.
High time the scrutiny be put on Chorus, a monopoly, to deliver.
No sympathy here if Chorus falls over.
I told you so - way back!
I don't see how this as an example of NZ politics not being business friendly and why it would precipitate a move off shore. How 'friendly' do you want?
The reality is UFB will be rolled out and available to those who want it as promised. The Government must and will, do what it takes to see this project completed. Nothing in recent months has indicated that won't happen. What has changed is that CNU shareholders have seen known investment risk ( in this case political) play out as is sometimes does.
Telecom is partly to blame. I understand that unlike the other retailers, Telecom will still provide your voice over copper, which means they have to hook up cooper and fiber. And resource consents only allow one cable to be hung overhead in some areas.
I would expect that $3000 to come down - otherwise they would just subcontract the other installers.
Actually I was thinking the same. Far too many just not doing anything, no wonder they are going bust. One guy slowly digging a small hole for 2 days and others were just watching him and then pissing by my fence when they had port-a loo. Most of the drilling was done by thrushing. Looking at how the T/L were going about, it could be seen they were least organised. Lack of planning as well.
Stay well clear of CNU until the dust settles, way to much uncertainty. Madness how things can change.
I believe when they are digging up the roads they are not just laying a 'few cables' but laying new trenches and pipes to run the current fibre through, as well as making it a lot easier to install further fibre/infrastructure in future by vertical duct access into these new trenches/pipes they are putting in. but yes agreed they are not making efficient use of resources.. seem to be following the road workers model ;)
Doing both at the same time - the wires for chorus, and and widening the road to add an additional lane to turn down Willis. The additional lane looks compete, but the wiring, oh my god.
One positive (though not for me), is that they start work at about 6:30am and tend to go through to about 12-1am the following morning. And I'm sure its health and safety + unionisation or the likes that requires the possible maximum number of staff to be there at all times.
Down over 10% at opening coming up.
Wow, the buyers have completely disappeared.
Poor Chorus, honestly I feel quite disappointment by the whole situation.
It's probably safe to say a few of us were looking for a good reentry point, but it looks like this company may just keep getting shat on, and become the play thing of the next election.
Bought back in at 1.48. Getting far too cheap and the market over reacting IMO.
Just keep in mind that the just because the Legislature will not intervene it does not mean that the Executive won't either.
There is already discussion out there about ways the Crown can mitigate the effects of the Commerce Commission.
I'm not holding - I sold out on the rebound following the first debacle over this whole thing.
Disc: Sick of communists.
Where the price will settle once all the dust finally settles, who knows, but what we have here is a free warning for those invested in the recent power company floats. The Left, who are looking stronger almost by the week will make whatever changes they think are in their voters interests with total disregard for its impact on the capital markets.
Fellas, this is going to drop further, I would not be going near it even at these levels. Sentiment will be negative.
Sorry she advised the prime minister not the other way.
Last year, Chorus made monopoly profits of $171 million and paid $95 million in dividends to shareholders, of which up to $600,000 would have been paid to IML. At the same time, Mr Key has told parliament that Chorus chair Sue Sheldon privately provided him with confidential information that indicated her company was at risk of going broke. Despite this, the copper monopolist planned until recently to pay another $100 million to its shareholders in 2013/14 dividends, the Coalition says... NBR
Yes Roger, Just sent my parents the PWC report as they bough into MRP and Meridian. I just dont understand why people have had such a narrow scope interm of investing. Its like the only shares on the market for them are MRP and MELCA. I think there are far better investments on the NZX with what i belive is better growth and lower risk. Also why would you invest in two power comapnies, surely you should invest in another industry to spread risk. Anyway thats my rant over.
http://media.nzherald.co.nz/webconte.../PWCReport.pdf
DISC - dont hold MRP, MELCA or CNU, but if there are any big price drops I might pick some up esp MELCA.
Monopoly. We were all brought up to believe that buying the utilities (the Railway Stations) was a safe bet. With all 4 you were pretty much guaranteed a slow but steady income. Buying properties and putting up hotels was guess work and speculation.
But the world has changed...
Thanks for the link
pg 10 says it all huh
Attachment 5116
Designed to screw New Zealandars and bring mafias in.
What I want to hear is what is Chorus management doing about the situation.
Nothing but a deafening silence from that quarter so far
We need some communication to shareholders - and soon
Mark was on Radio NZ this morning, have a listen.
http://www.radionz.co.nz/news/politi...icing-solution
What is there to say? They have said they are helping the Govt review, they have withdrawn dividend guidance until settled and they have appealed the ComCom's decision.
There is probably nothing else to say until the government reports back other than to re-emphasis that they disagree with the ComCom and hope to receive a higher price once the full review is undertaken.
I think there will also be some action over whether changes are backdated etc but that isn't a factor for at least a year.
I recall Paper Tiger put a value on CNU back on this thread based on predicted Comcom changes. Is there anyway to easily find this without looking at every page? Can I search PT posts?
Thanks Bobcat
Pity I didn't heed your valuation PT. Small consolation that I halved my holding. Sparky will be sad National are blocked from intervening. Is that a knock on effect for the power companies or todays report on power in NZ.
I bought some today. I have this thing for buying things on bad news when the price drops, that's a silly thing to do huh?
But I was thinking of buying this at $2.30 not so long ago so could have been sillier I guess.
Today's drop to 147 was almost a 20% drop - that's huge for a single day. If this was a bottom that had appeal for the big boys then IMO it would've rebounded higher than its close of 153. If Monday that 147 - 150 range is tested and holds then the day may close with a higher low...in which case it could well be time to buy.
The more conservative amongst us may prefer to also wait for a higher high. The less risk-averse (and reckless?) amongst us may instead throw caution to the wind and simply try to pick a bottom (a grubby business).
BC
Make sure with deadcat bounces that you also have a strategy for selling, not just one for buying. Many sudden drops like this rebound for a day or two then drift south again and may take weeks (sometimes months) to recover on an upward trendline.
If I come in to buy some Monday, I will do so when support looks solid but will stop loss my holding in case I get it wrong. There's enough liquidity with this stock to do that. Then all I have lost is brokerage. My sales strategy would then be to sell either on a spike or after no more than three days. Yep, that could work (it has before - not always but often enough to be in the money).
BC
This drop might be a bit of an over-reaction by the market. Amy Adams all but said that legislating over the Com Com's decision was the last resort weeks ago so I don't think all that much as changed.
Bought today at 1.52 and will hold for at least a year, will add if it falls further.
SkyCity, the power companies and now this - these latest political shenanigans may be the last straw for a lot of overseas investors.
I'm generally concerned that the management of Chorus didn't really take into consideration the recommendations the ComCom could have come out with when they were putting in their bids for UFB, and now want to sit back and claim foul? Isn't that just blatantly irresponsible?
They should have had people in the business doing risk assessments on different scenarios. Instead they've gone the way of Solid Energy, chosen the scenario that management liked, and now everyone is sitting back flabbergasted at how this could happen? It's madness.
I have been watching the tumbling CNU stock with great interest. I still believe there will be a good buying opportunity, but only once a clear support level has been found and their management team has a clear plan forward to return them to a path of sustainability. I suspect we're going to watch it tumble much further before it stabilises
Are they going to have issues with debt covenants - and I am not talking about borrowing more, I am talking about current borrowings. If any covernants are tied to market value, they they are stuffed.
I agree. As a relatively new modest investor I would be tempted to buy Chorus for the following reasons, Please feel free to comment. I am 55 and would like to acquire a portfolio of dividend producing stocks over the next ten years I know that Chorus will have to drastically reduce its dividend pay out, and will be priced accordingly. However once the investment in UF broad band is completed and the take up by consumer matches expectations then in 5 years time Chorus will be able to deliver a good dividend stream
Sam Morgan tweeted about this on the weekend. "Chorus now worth only $600m. Must be cheap at some point unless you think it is going broke, which the government would never allow."
I think he's got a pretty good point. How much is the copper network inherently worth? If you can pick the bottom I think you'll do pretty well.
Herald poll this morning was running 80/20 against support for Govt. intervention/support. Politicians with half a brain will react to this sentiment, regardless of what they read on this forum.
Has anyone calculated some numbers on the current price and com com decision - interms of revenue, cahsflow, profit and DIV - now $1.45 ish. I think it could drop further but I will keep an eye on CNU. Dont hold but could be keen to pick up some "xmas sale" shares...
Normally I take a fundamental approach to asessing fair value of a stock but I always look to validate that with technical analysis.
In this situation I believe that only the very brave need apply before the chart shows a clear bottoming out.
This could go to a dollar or much worse before all the dust has finally settled. Who wants to stand in front of a train ?
Just watch the chart, fundamental analysis in this situation is all but useless. If and when it goes back through the 100 day moving average going back up and sustains that movement, that'll be the time to buy and not before, in my opinion. My 2 cents.
Its worth nothing ... once CNU finishes building the Fibre network. Just like anologue TV, and UHF SkyTV, Windows XP support, at some point, they will just turn it off (in those areas with 100% Fibre coverage).
While they are intrinsically linked, the ComCom decision on Copper has nothing to do with the UFB rollout. If CHU pulled out of the Fibre contract, the ComCom decision would still apply to its Cooper business.
Therefore, what it really needs to do is pull out of its (legislated?) obligation to provide copper services. If they have rolled out Fibre to a whole area, they should send a letter sayingQuote:
In 1 year, we will no longer be maintaining copper service. Please contact Telecom, Vodafone or your existing telecommunications providered to connect to Fibre
I think if you polled the National parliamentarians, you would also get 80/20 against, if not higher. It's really only the media who are reporting this as if the Nats had put it up in Parliament - they have not, and will not imo
Chorus have already asked for a review of the price to build a copper infrastructure. This will take about 2 years according to the Commcomm, and should legitimise the current pricing regime no sweat. So what are we going to see? A drop in their income from after Dec 2014, then a massive increase again at the beginning of 2016. In the interim, no divs for shareholders for 2014/15, (the cash will be used to bridge the 'income for capex' gap while they await Commcomms new decision) and a lot of wailing and gnashing of teeth from all and sundry
I don't currently hold but am getting itchy tingling feelings
Are the results from the review back dated. I am under the impression they are which is why they say the "copper tax" will only get shifted from CNU to the retailers as they cant reduce their prices as they may have to pay up at a later date. It was this uncertainty that I thought Amy Adams said she wanted to avoid.
Not sure Harvey. Need to read further on the finer detail, but I see your (and her) point.
Now that it seems almost certain dividends are for the chop, and John Key has said there is to be no time extensions/delays to roll out today, what options remain for Chorus?
More government loans, guaranteeing of loans, share purchases? With election year looming you can already hear the opposition drums banging out crony capitalism repeatedly and all parties altering their agendas according to the populous to achieve/stay in power.
I expect even if they do any of these things to save political face they are going to expect chorus to make some contribution maybe over and above reduction of dividends?
Chorus Capital raising? With the fast falling SP this will mean having to put up more shares at lowered prices further diluting already fast diminishing profits.
Positives?
Hang in there shareholders for another full pricing decision that may or may not go your way? Hang in there stage 2, and wait until fibre fully rolled out, (on time and within budget of course:) to supersede low copper to return to business as usual?
But in this kind of political and regulatory environment can it ever be business as usual? What if the comcom or some future political party steps in further down the track after fibre is in use and says too much profit being made, too much divs to holders being paid, consumers getting ripped off compared to international pricing and here we go again?
Discl: watching/not holding:)
Today we are witnessing a lower low....it's not yet time to buy IMO. I'm expecting a big volume dive before the bounce. Looking to time my buy on either:
a) the next dump (anticipating an immediate rebound); or if I miss that...
b) a day when the sp achieves a higher low than the previous day; or
c) later around an inverse shoulder (i.e. at the first dip travelling north).
In anticipation of a), I have a small bid that I'm adjusting each day to sit 10% below market price. It's currently in the 130's.
Risk/reward profile varies of course for each tactic:
a) High
b) Med
c) Low
Shareprice down another 5% today and already over 4m shares traded. I wonder who all the brave contrarians are?
To okay's list of considerations above, I'd add the risk of the introduction of a new cornerstone equity partner/shareholder at a further heavily discounted price. Heavily dilutive for current shareholders of course but it may become a necessity as events develop.
Latest official update: https://www.nzx.com/companies/CNU/announcements/244624
I'm sure the government will be as hands-off as possible but they are going to have to do something. Aside from the threat to the UFB, if Chorus were to get in real difficulties they'd risk disruption to our existing internet access. Anyone fancy days, weeks, or months of no internet while receivers try to figure out the mess? Can you imagine the economic hit the country would take?
Good post, sums the rather dire situation up very well. With the left so strongly alligned and the apparent rampant anti-capitalist approach they seem so happy to take, its difficult to see why anyone would bother to invest in this sort of environment.
Disc, watching from the sidelines until the bottom of this black hole has been proven to be reached.
Any thoughts about the outcome of the high court case?
I like this quote from the PM:
"He reiterated there might be other options, saying the Crown had got a good deal from Chorus originally."
Source: http://www.stuff.co.nz/technology/di...ules-out-delay (end)
Chorus make a good case-
Chorus is also filing for a High Court appeal of the same decision to determine whether the Commission has applied the law correctly.
“The decisions to apply for an FPP and file for a High Court appeal have not been taken lightly by Chorus’ Board and Management, but the limitation of two benchmarked countries despite the specific factors set out in section 18 and 18(2A) has left us with no choice. We have a duty to our shareholders to ensure we explore every option before us, including the High Court appeal,” said Mark Ratcliffe, Chorus CEO.
“Completing the FPP processes for UCLL and UBA could well mean that we take another two years to end up rebalancing at around the same aggregate price as we have today. There is also precedent for the revised prices from the FPP to be backdated.
“We recognise that the Commerce Commission has to operate within the regulations that are set in the Telecommunications Act. The Commission’s initial decision is a symptom of regulations that simply do not align with the Government’s policy of a transition to fibre.
“We are not looking to blame the Commission, because it can only referee by the rules of the game as they are set.
“While the Government has only just begun its policy reviews, and we recognise that it may no longer have the support it needs for a direct intervention on UBA pricing, a legislative process is required to free up the Commission to do its job in a regulatory framework that is aligned to Government policy,” he said.
Speaking when she announced a review of Telecommunications regulation earlier this year, ICT Minister Amy Adams said: “regulatory certainty is an important factor in the ability of New Zealanders to have early access to high-quality communication services based on new technologies … the policy framework needs to be predictable and stable for all concerned.”
And in an independent report, former Telecommunications Commissioner Dr Ross Patterson stated that the current regulatory framework is not appropriate to support the transition to fibre.
“The ladder of investment regulatory framework that is currently in place is designed over time to remove the natural monopoly of the access network,” said Dr Patterson. “However, the structural separation model adopted through UFB accepts that the access network is a natural monopoly and building competing networks is inefficient. The two frameworks cannot co-exist efficiently.
So JK now acknowledges that his Govt could have ruled out legislation to override the com com before the other parties showed no support for the idea and he didn't think last weeks decision caused the share price to drop, let's crack open a few dozen Tuis boys, I'm with the Aussie fund manager on this one, the Govt ramped up the share price earlier in the year by indicating strongly they would override the comcom.