Yesterday’s FEC hearings on the Telco Amendment Bill were remarkable.
By the end of the day it was starkly obvious that the Bill hands a gold-plated license-to-kill to Telecom under the guise of ‘structural separation’. No-one, not even Govt members, could deny that.
Don’t take my word for it: check out the Commerce Commission submission, or (bipartisan) Internet New Zealand’s, or Vector’s, or TelstraClear’s – all here.
The Bill seeks to lock in a “regulatory holiday” by preventing the Commerce Commission from exercising its current oversight for 10 YEARS. NO other country in the world has done that, and it would be illegal in Europe. It may be in breach of NZ’s WTO obligations here.
Despite that Telecom had the gall to ask for longer! And to weaken the purpose clause of the Telco Act to boot! Have they lost their PR mind? Do they want to channel the ghost of abuses past?
Fair trading “equivalence of inputs” rules between the network owner (Telecom) and wholesale competitors would be watered down so much as to be unenforceable. Arms-length trading rules currently in Telecom’s Operational Separation Undertakings become “optional”.
And so on. It’s so patently obvious it is not even worth repeating all the examples.
No wonder Steven Joyce wanted the hearings over in indecent haste.
The result of this great leap backwards to the 1990’s will be much higher prices and less choice for consumers for a decade. YOU will pay for this sleazy deal.
So WHY has the National Government done this?
Roger Douglas summed it up – it is a “legislative subsidy”: National is ‘selling the law”.
In plain speaking, National in the last election over-promised ultra-fast broadband to 75% of Kiwis for $1.5 billion. But rather than being a clean subsidy there were massive strings attached, requiring a commercial return through the hopelessly conflicted Crown Fibre Holdings. The numbers just did not add up.
Hence no rollout for 2½ years, and Steven Joyce is worried about his reputation.
But instead of fronting the problem honestly and getting the whole industry to be part of the solution while building a vibrant competitive market, National has done a side-deal with the incumbent telco that leaves everyone else worse off and the market beggared beyond belief.
That will set back innovation, chill investment and deliver less broadband at higher prices than necessary for a decade to come.
As if Kiwis aren’t facing enough price rises without paying too much for their broadband as well.