New cable blows government arguments away

The new undersea cable between Auckland and Sydney proves the Government’s earlier claims that a second cable isn’t necessary to increase competition are completely false, says Labour’s communications and IT spokesperson Clare Curran

“The new cable utterly blows out of the water claims by the incumbent Southern Cross and the National Government that the one current cable is more than capable of handling future capacity and lowering prices.

“Labour believes that international broadband infrastructure and connectivity is as important as our internal infrastructure as the platform for economic transformation based on technology-related industries.

“The National Government has blocked its ears to the calls for investment in another undersea cable buying into the Southern Cross argument that it wasn’t needed. Today’s announcement shows they were wrong.

“A new cable will bring much needed price competition at the wholesale level and introduce more capacity which hopefully will open up the market for greater data usage and drive innovation and more activity at the retail level. It’s a welcome move.

“However there are serious competition issues as Telecom has ownership interests in both cables. Telecom is effectively competing with itself at the infrastructure level.

“We are also concerned that the cable infrastructure will be built by the telecommunication companies which will then provide the retail services on it.

“Labour seeks assurances that these issues are addressed transparently and that there is commercial wholesale capacity available for other carriers on an equal footing.

“There is no doubt that there was a compelling case for another cable. The response of the telcos proves that. We just need to make sure that the New Zealand consumer is the long term beneficiary in cheaper prices and increased capacity for data use,” says Clare Curran.