In remarks prepared for the Commerce Commission benchmarking conference to determine the price for UBA (unbundled bitstream access) which started yesterday, Mr Ratcliffe said if the incoherency in the framework was not reconciled, every New Zealander would be affected.
''International investors will simply walk away from New Zealand.''
The proportion of international shareholders of Chorus shares had fallen from about 55% to about 45% since the draft UBA decision.
At the time of the demerger of Chorus and Telecom, about 75% of Chorus shares were held by international investors.
It was now increasingly ''everyday'' New Zealanders who were affected by the ongoing fluctuation in the Chorus share price that resulted from the uncertainty, he said.
''Any decision on copper pricing will directly impact fibre build and uptake - meaning New Zealanders could miss out on the very benefits of fibre.''
The commission's review stems from its legislative requirement to regulate prices to access existing copper-based telecoms networks under rules written to cope with an unseparated Telecom.
Mr Ratcliffe said the review announced by the Government provided the the opportunity to achieve a coherent framework fit for purpose. But if the commission continues with the UBA process, leaving the price around current levels will minimise the incoherency.
''To be honest, I'm not sure why we are here. What is frustrating is that there is not even a suggestion that Chorus is making excessive returns. And nobody seems to be considering the impact of any decision on Chorus overall.
''We are debating incremental changes to individual services - without an eye to the bigger picture. If you focus on the wrong questions, you get the wrong answers.''
Chorus told the market in December that a UBA price of $8.93 would have a $160 million operating earnings impact on the company, Mr Ratcliffe said.
It was hard for anyone to be objective in the process when there was talk about transferring that around the market. If that draft was confirmed, of that $160 million, Telecom would get about $80 million, Vodafone would get about $40 million and the rest would be spread among other industry players.
Perhaps some of that money could be transferred through to end customers. But, he asked, if it was not, was the next step to move to retail regulation to ensure pass through?
Any business with a long-term focus like Chorus - investing ahead of demand - had to be enabled by existing revenues plus financing. For ultra-fast broadband, which required billions of dollars of investment from Chorus, the majority came from existing revenue.
''There are no other revenue streams for Chorus to make up the difference. Those other streams went with demerger. The rest comes from debt and equity investors who need to see a return.''
He said investors were again seeing major uncertainty around critical infrastructure services in New Zealand.
Unbundled access
• Unbundled bitstream access (UBA) is a service that allows telecommunications companies to supply broadband services to customers without the need to replicate Chorus' electronics or software.
• Amendments introduced to the Telecommunications Act 2001 by the Telecommunications (TSO, Broadband, and Other Matters) Amendment Act 2011 froze the prices that apply to UBA through to November 30, 2014. The Amendment Act also required the Commerce Commission to calculate new, cost-based, prices for UBA to have effect from December 1, 2014.
