Major uncertainties around Broadband plan
Major concerns are being raised around the Government’s ultrafast broadband project, which could derail the goal of affordable and accessible broadband services for New Zealanders, Labour’s communications and IT spokesperson Clare Curran said today.
“Concerns expressed by industry groups InternetNZ and TUANZ that an operational separation variation request by Telecom NZ may amount to the end of operational separation are extremely concerning,” Clare Curran said.
“This follows last week’s news that the Local Fibre Companies, the private public partnerships set up to manage the $1.5 billion broadband project, would enjoy a 10 year regulatory holiday locking out the Commerce Commission from reviewing prices for fibre available to New Zealand consumers.
“Instead, fibre prices will be set by commercial contract to be negotiated with Crown Fibre Holdings (CFH), the entity set up to evaluate the bids to run the network, and proofed against review by the regulator for ten years – a situation that applies to no other network industry in New Zealand.
“The role that Telecom, or a separated part of Telecom, will play in the rollout of the ultra-fast broadband policy is an underlying driver of both issues. It remains the biggest unanswered question, as it has been since National’s broadband policy was first announced.
“It now appears that Telecom could be seeking a separation variation in return for its assistance to Government through picking up a role in the UFB initiative.
“This is the fourth variation to the original Operational Separation agreement requested by Telecom, each of which have sought more concessions from the Government.
“If agreed by the Minister, it would undermine the separation arrangements between each of the three business units which make up Telecom and place a huge amount of bargaining power in Telecom’s hands around the ultrafast broadband project.
“Agreeing to this variation would weaken the government’s negotiating position with Telecom, and risks a situation where the copper phone network becomes less competition friendly. This would increase prices and slow the development of better broadband, in the long period of time when ultra-fast broadband is being rolled out.
“Together, the two changes would in essence entrench unscrupulous monopolistic behaviour and keep the Commerce Commission out of the fibre industry for ten years.
“Trading off regulation for investment is not in New Zealand’s interest. It doesn’t work, as recent history proves – and is simply a recipe for special benefits for investors and second rate services for Kiwis.
“Labour will be carefully analysing the implications and consulting with stakeholders before announcing its policy response.”
