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.
Is it a “sell-off” or a “give-away” because, from what I’m seeing, it looks far more like another give-away of taxpayer $$$ and special rights to corporations – esp. to Telecom.
I find myself in agreement with the Allan Freeth chief executive of TelstraClear – It’s a democratic farce.
Steven Joyce chose his prefered option, using a method he refused to release to OIA requests, and now he is making it happen by turning the submission process into a joke.
Telecom is about to walk out of this deal having secured a sizeable bribe from the New Zealand public to do the work they should have been doing anyway. And Telecom will not be under the eye of the Commerce Commission for a decade. So really, Telecom gets to do what it likes, meet or fail to meet obligations as much as they like, until 2021.
I thought Steven Joyce was supposed to be working for the public of New Zealand. I guess I was wrong.
The link in the story above doesn’t work for me. Is it a permission thing or a bad URL?
http://ourhouse.parliament.nz/en-NZ/PB/SC/Documents/Evidence/?Custom=00DBHOH_BILL10470_1
Could this be undone when there’s a change of government? If Labour comes out and says they will repeal the lack of oversight at the first opportunity (and it’s pretty certain that there will be a change of government sometime within the next decade) – and apply Commerce Commission oversight retroactively, could that temper Telecom’s actions? I know that traditionally NZ does not apply ex post facto law, but that’s more a guideline than a rule.
Allan Freeth can whinge all he wants but does it really matter? There is no telecommunications competition in NZ anyway, regarless of who gets the contracts.
Bill, OurHouse is Parliament’s intranet. Where stuff is public (like this evidence) edit the URL be deleting ‘ourhouse.’
Shame on Minister Joyce for this sell out. For a party that is supposed to be the party of business, National seem to have no clue at all.
This will have a monopololistic chilling effect for years to come. We need good, fast and reliable broadband, not a corporate welfare package.
Come on National; stop looking after your mates. Think ahead!
Sounds like it would be easier for government to do a deal with Vector and their cohorts, certainly sounds like that’s labours preference. Mind you with competing infrastructure resulting from that scenario the regulatory environment would have to change anyway.
From a consumers perspective having telecom and it’s infrastructure compete directly with the new govt funded vector network would introduce great competition and I assume that is what labour is looking for by opposing telecom?
David, I just enjoyed re-reading your press release from 3 years ago when National first announced their approach (http://www.scoop.co.nz/stories/PA0804/S00546.htm):
- “If this extravagant subsidy is ever rolled out all of the good work the government, industry, and business have done in dismantling Telecom’s monopoly position will be lost”
- “This puts all of National’s eggs in Telecom’s basket”
- Telecom will “have the government and the market over a barrel”
Unfortunately it looks like you’re predictions were correct and that that government is having to make massive regulatory concessions to get its scheme off the ground.
That link should read: http://www.scoop.co.nz/stories/PA0804/S00546.htm
What do Telecom and National get out of this?Someone needs to do something urgent..while the public are unaware because they are still trying to make ends meet..Telecom and co will be laughing all the way to the bank if they have their way. I am ashamed.A boycott on Telecom!?!
UFB isn’t economic, this is what happens whenever government tries to pick winners and create industries, National or Labour – either this nonsense or you try to nationalise whole sectors of the economy.
Anyone who knew about the history of Concorde could tell the taxpayer was going to get screwed as soon as you politicians decided we needed UFB yesterday…