Chorus shares rose in price yesterday as investors looking for certainty around the price of access to the company's copper network received some from Communications and Information Technology Minister Amy Adams.
Chorus shares rose more than 4%, to $3.02.
Ms Adams released the much-awaited discussion document that formally began a review of the telecommunications regulatory framework.
The Government announced in February the review required under the Telecommunications Act 2001 would start this year.
The first phase of the review would focus on the ''fundamental relationship'' between pricing for the legacy copper network and pricing for the new fibre network during the transition period until 2020, she said.
''New Zealand is in a unique transition period where the copper network remains viable, at the same time as a replacement network based on fibre-optic technology is being built, which will deliver significant gains in speed, capacity and reliability.
''In our view, the underlying approach to setting prices under the current framework based on replacement costs is sound. That is the access prices should be based on the forward-looking costs of a modern replacement network. This approach is consistent with international best practice.''
Relying on overseas benchmarks and complex cost modelling to estimate those costs created a high degree of uncertainty and might not be necessary, Ms Adams said.
Craigs Investment Partners broker Chris Timms said the decision by Ms Adams made economic sense.
The Government wanted its ultra-fast broadband network completed as quickly as possible and Chorus was playing a large part in that process.
''If they cut the price for copper access, how will Chorus fund the fibre roll-out?''Mr Timms took issue with some of the opponents to Ms Adams' announcement, who said the minister was putting the need of Chorus shareholders ahead of those of ''everyday'' New Zealanders.
The minister had provided some certainty until 2020, when the price became subject to review, he said.
Chorus chief executive Mark Ratcliffe welcomed the review and the establishment of a clear set of principles to guide the review.
''This second review enables everyone to engage in the establishment of a forward looking, coherent and stable policy environment that ensures a sustainable and efficient transition to fibre for the years ahead.''
For UFB to be successful, and for Chorus to maintain its current capital management settings, it was important to get the mix of pricing right, he said.
The options presented yesterday suggested a potential decrease of $2.50 to $7.50 on Chorus' broadband pricing.
Vodafone chief executive Russell Stanners said an opportunity would be missed if the scope of the review remained too narrow.
''We need to open up a broader conversation and look at all aspects of the fibre market, to ensure a strong, competitive, consumer-focused market evolves. Limiting the review to simple supply side fibre and copper costs misses the point.''
Telecommunications Users Association chief executive Paul Brislen accused the Government of putting the interests of shareholders before those of others.
The Government proposal sidelined the Commerce Commission and allowed the price of wholesale copper broadband to be set directly by the minister.
Labour Party communications and IT spokeswoman Clare Curran said the Government had given its ''mates at Chorus'' a huge windfall by proposing to keep the price of copper broadband at the more expensive level of fibre broadband.
