PM stands by his warning on Chorus

Prime Minister John Key. Photo / Mark Mitchell

Prime Minister John Key stands by his comments that network company Chorus could "go broke" if a Commerce Commission recommendation to cut internet prices is adopted.

That's in spite of the New Zealand and Australian stock exchanges yesterday confirming Chorus had not informed them of any such risk, as it is obliged to do under market rules.

Last month Mr Key warned that Chorus, which is handling about 70 per cent of the roll-out of the Government's ultra-fast broadband network, "could go broke" if a Commerce Commission recommendation for a $12.50 per customer cut in the wholesale price of copper-based broadband services were adopted.

The lobby group Coalition for Fair Internet Pricing, which is pushing for the Commerce Commission's ruling to be adopted, wrote to the two stock exchanges asking if Chorus had told them of any risk it could go bust.

"We're pleased with the ASX and NZX conclusions because they confirm that there is absolutely no risk of insolvency under any of the copper pricing scenarios put forward by the Commerce Commission as the independent regulator", said Sue Chetwin, coalition spokeswoman and Consumer NZ chief executive. "This means the roll-out of ultra-fast broadband can proceed as planned."

But Mr Key told reporters in Brunei yesterday his comments had been based on Chorus' own statement about the issue and in-confidence advice the Government had received.

"I still stand by those comments, absolutely. You only need to look at the statement Chorus put out on the implications it would have. The Government took in-confidence advice."

Mr Key denied he was receiving information from Chorus that should have been disclosed to the markets.

Labour leader David Cunliffe said Mr Key should apologise, given "the Australian and New Zealand stock exchanges found no evidence to back up his statement".

"No one believed him then. Now the ASX and NZX have said there's no evidence to back up his claim, it's time for him to apologise to New Zealanders for misleading them, especially anyone [with] shares in Chorus."