Yesterday’s response in the House by Steven Joyce to a question about whether Telecom would have a role in the urban rollout of broadband was fascinating for two reasons.

Firstly, it put Telecom firmly in the frame to apply to potentially be part of the urban and rural rollout. But only if they agree to undergo further structural separation. On the face of it, it looked as if Joyce was appeasing Telecom, following their somewhat snarky media release yesterday where they felt left out of the government’s urban broadband announcement.

Joyce reassured Telecom that the government would be supportive of “all bids” that met the criteria and that regional and national bids would be considered. He stressed that the challenge would be to meet the requirements of open access and ownership arrangements of the companies delivering the rollout (called Local Fibre Companies) where they could be shareholders but not own the companies.

Ultimately, that’s about Telecom agreeing to separate, probably its network infrastructure (Chorus) and wholesale arms further from its retail arm.

But secondly, it was strange that Joyce was actually addressing this issue in the House, off his own bat. His backbench MP asked the question: What role could Telecom play in the urban broadband initiative?
So there are two potential conclusions.

First, Joyce was keen to reassure the country’s largest Telco that they could have a piece of the action and the government wasn’t excluding them. Sounds fair.

Second, that Joyce was delivering a not too subtle message to Telecom, that up until now they may have chosen to ignore. Guys, if you want a piece of the pie then you have to play ball and voluntarily separate further. Interesting wasn’t it, as a number of commentators have already pointed out, that the Australian Government said more or less the same thing (on a much large scale) to Telstra the very day before! Synchronicity? Hmmm.

Just want to make clear. This is observation. It’s not criticism. Labour took Telecom down the path of structural separation. Way before Australia. If that’s the message Steven Joyce is delivering, then it’s a continuation of what Labour started under David Cunliffe. And well, that’s a good thing.

So what does it all mean? That Telecom wants the lion’s share of the work. That they have publicly said they’re not happy with the government’s urban rollout plan. That Joyce has reassured them they have an equal chance with every else. And that the people who actually will make the decisions about who will be the successful bidders haven’t yet been appointed to the Crown Fibre Holding Company. Those appointments will be critical to the decision-making process.

What else? Well, if Telecom doesn’t play ball, we could end up with a government-backed network AND Telecom. What does that mean for our largest Telco and one of our important brand companies (even if it’s not majority NZ-owned). The ball’s in your court Telecom.