The end of free local phone calls. Foreign ownership of Telecom. Scrapping the Kiwi Share, which currently requires government approval for any shareholder to acquire more than a 10% stake in our major telco. No it’s not the Labour opposition scaremongering. It’s proposals contained in a Cabinet paper, prepared by Bill English, posted on the MED website, which says Treasury will lead a review of the Kiwi Share. It’s creating some consternation out there. And when you look across the Tasman and ponder what happened when the Howard Government sold it’s majority in Telstra offshore, you have to wonder why you would want to create a monster on our shores.
I raise this because it is becoming pretty clear that the National Government 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 it seems, in 2009 we are seeing some worrying signs of a weakening of that position and a shift towards the right wing approach to regulation.
In an opinion piece in the NZ Herald on 18 March, Fran O’Sullivan raised questions around the resignation of Paula Rebstock as the chair of the Commerce Commission and what the new approach to regulation would be.
She said “The Rebstock resignation does provide an opportunity for reform. But it is important to make sure it is soundly based. Not simply to suit the commercial objectives of individual companies.”
The concern I’m hearing is that we could be moving into a policy vacuum in regulation. One very worrying sign is the government’s silence on the reinstatement of the Telecommunications Commissioner. This is an extraordinarily important position at a time when stability and knowledge is required in a fast changing sector with huge reforms underway.
The telecommunications industry makes up just 3% of our GDP but this is growing and is one of the fastest growing industries in this country, as well as across the world. This is a time for strong leadership and for a transparent and robust regulatory approach. Labour understood this. It seems National doesn’t.
And I challenge this government to tell the New Zealand people why they’ve waited nearly six months to tell us what they’re going to do about the Telecommunications Commissioner position?
Perhaps if the term “telecommunications” appeared in Marx’s Capital, Labour MPs would have a firmer grasp on the issues that affect the industry.
Rather than hypocritically espousing the necessity for a regulatory framework less than five years after the Labour appointed Commerce Commission gave Telecom’s monopoly a rubber-stamp of approval at the behest of the last Labour government, perhaps they might try contributing something useful for a change.
Start with a heartfelt apology for devastating ICT in New Zealand back into the digital dark ages Labour and work forward from there.
“Labour understood this.”
No they don’t – if they did they would have renationalized all telecommunications in NZ in 2002. It’s an infrastructure item and, as such, is a natural monopoly.
There is no doubt the TSO is in urgent need of reform. Rural users have poor quality services and no choice; urban users are paying more than they need to; the TSO levy imposes a tax on competitors; and the TSO enshrines a Telecom monopoly in most of the country. These days satellite, mobile, fibre can all deliver local call services and Internet access. Why tax these alternatives to prop up an outdated copper monopoly?
Why not scrap the Kiwi Share and TSO levy and pay a subsidy out of tax revenue for any of the 14,000 commercially non viable customers who hold a community services card? Use the Rural Broadband Fund to provide free satellite dishes to low income households where they have no affordable access to the existing commercial providers.