Could this be the end of free local calls?
The National Government should front up if it’s seriously considering opening the way for full foreign ownership of our largest telecommunications company and the prospect of New Zealanders paying for local landline calls, Labour communications and IT spokesperson Clare Curran said today.
A proposal for scrapping the Kiwishare in Telecom is outlined in a Cabinet paper, prepared by Bill English, posted in a hard to find place on the Ministry of Economic Development’s website.
The paper says Treasury will lead a review of the Kiwi Share and the Telecommunications Service Obligation (TSO).
The Kiwi Share requires government approval for any shareholder to acquire more than a 10% stake in our major Telco.
The TSO limits rises in phone line rentals to the rate of inflation and guarantees "free" local calls.
The Cabinet document also proposes a wide ranging review of New Zealand’s regulatory framework, including the RMA, Climate Change, Building, Industrial Relations, Overseas investment, financial markets and local government regulations.
“There is a lot of concern in the telecommunications industry generally about the weakening of the rules that stimulate competition,” Clare Curran said.
“It appears National is intent on a creeping dilution of our regulatory framework and our regulatory body the Commerce Commission, and it’s time we started talking about it.
“The previous Labour Government put a lot of effort into strengthening our regulatory framework after the devastation of the 1990s. In 2008, reforms to strengthen our legislation were supported by the National opposition.
“Now we are seeing some worrying signs of a weakening of that position and a shift towards the right wing approach to regulation and competition.
“We need to be putting in place rules that strengthen the marketplace, look after consumers and enable businesses to run efficiently and well.
“We don’t want to move in a direction where the Commerce Commission becomes purely reactive and the telecommunications industry becomes a wild west.
“When you look across the Tasman at what happened when the Howard Government sold its majority holding in Telstra offshore, you have to wonder why you would want to create a monster on our shores by allowing Telecom to be sold off to foreign interests.
“Is this what New Zealand wants?” Clare Curran said.
