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Posts Tagged ‘Commerce Commission’

Does Steven Joyce know the answers?

Posted by Clare Curran on August 4th, 2010

Note: My question is at 1 min 10 secs

Steven Joyce today ducked a question in parliament on why his government’s decision to regulate mobile termination rates contradicts its plans to provide its new fibre network with a ten year regulatory holiday on the pricing of fibre.

Was it because he didn’t know what to say or because he just didn’t want to raise attention to the contradiction. It’s the first time I’ve seen him actually stumped.

The question put to Mr Joyce in the House today was:

Given his logical decision to regulate on MTR, what is the basis of his illogical decision to give a regulatory free pass to the coming new fibre networks

In ruling out the question Speaker Lockwood Smith also refused to allow the following question:

Given the Government’s conflicting role as an investor and regulator of the new network, how will New Zealanders who take up fibre know that you are putting their interests first?

I think New Zealanders, who want ultrafast broadband and want a new network which delivers benefits for them using $1.5 billion in taxpayer’s money, would like to know the answers to both those questions.

Labour is glad the Minister decided today to regulate on mobile termination rates. But we’re not glad that the government could now derail the goal of affordable and accessible broadband services for New Zealanders with news that Local Fibre Companies, the private public partnerships set up to manage the $1.5 billion broadband project, will enjoy a 10 year regulatory holiday locking out the Commerce Commission from reviewing prices for fibre available to New Zealand consumers.

Instead, fibre prices will be set by commercial contract to be negotiated with Crown Fibre Holdings (CFH), the entity set up to evaluate the bids to run the network, and proofed against review by the regulator for ten years – a situation that applies to no other network industry in New Zealand.

There is a real of a lack of transparency, confused governance and increasing uncertainty about how the decision is being made to spend $1.5 billion of taxpayer money. All the players are saying this. Industry commentators are saying it.

That’s why Labour has called for the Commerce Commission to have an independent oversight role.

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Filed under: broadband, comms & IT
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Broadband too important to muck around with

Posted by Clare Curran on August 3rd, 2010

Let’s see how much of this you agree with this.

New Zealand needs high quality ultrafast broadband. In principle, the goal of delivering this to New Zealand businesses, schools, hospitals and homes is the right goal.

Delivering high quality UFB is a core infrastructure priority for governments throughout the world and is in line with the US, Australia, Europe and many Asian countries. New Zealand is not leading, we are following many other countries in delievring on this goal.  It is likely to take (at least) 5-10 years to deliver.

Delivering high quality UFB is a complex undertaking to get good outcomes for our country. It requires transition for existing players. Including Telecom. But transition is about the whole industry not just Telecom and it’s a great pity that what happens with the UFB project and how it will be delivered, seems to be all about Telecom.

There is a view that Telecom is currently the most vulnerable telco in the world. I’m not sure about that, but it is important that Telecom can survive the next 3-5 years and make the transition. But it shouldn’t be able to demand the terms.

The next ten years are unknown territory for telecommunciations in New Zealand. The industry is poised to change forever and to become about fibre rather than copper.

Transition will likely require some changes to existing legislation, in particular the Telecommunications Act 2006.

Crown Fibre Holdings, the body charged with making a decision on the UFB contract, is an infrastructure company. It has no ability to determine a vision, no policies and no strategic element.

Telecom’s statement yesterday wanting to ‘integrate the UFB (overseen by CFH and a ‘co-investment’) with the Rural Broadband Initiative (a grant scheme being driven by the MED) and funded by the new look Telecommunications Service Obligations (overseen by the Commerce Commission) shows what a confusing regulatory alphabet soup the Government’s cornerstone broadband policy is becoming.

We need clear orchestration of all the elements in this process. It’s complex and it needs flexibility and transparency. It’s taxpayer’s money. That’s why it’s time to change the governance process.

And that’s why today I called for Telecommunications Commissioner Ross Patterson to be given an independent oversight role in the government’s ultrafast broadband (UFB) scheme.

Communications Minister Steven Joyce should now consider changing the governance process for the UFB decision and to involve the independent Commerce Commission ensure public confidence in the process. At the very least Steven Joyce should remove himself from decisions about Telecom’s requests for variations to its operational separation agreement with the government.

Dr Patterson has sufficient credibility and experience within the industry to bring independent oversight and objectivity into the process and to be mindful of New Zealand’s long term interests in developing our future in broadband.

Otherwise there is likely to be a cloud over the broadband decision. Whatever the outcome, how can the public have confidence that Telecom is not somehow holding our country to ransom with its bid to secure as much value for its shareholders as possible in securing the broadband contract?

“New Zealand’s interests are paramount, not the Telecom shareholders and the government should recognise this.

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Filed under: #OpenLabourNZ, broadband, economy, infrastructure
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New Zealand, not vested interests paramount on broadband

Posted by Clare Curran on July 5th, 2010

We don’t appear to be getting much closer to a workable solution on how to roll out ultrafast broadband to the nation.

Every person I speak to, every event I go to, is consumed with doubts, questions and concerns.

The biggest issue is what role Telecom, or a split of part of Telecom, will play in the rollout.

Because there’s a closed tender process underway there is no ability for a public discussion led by our government to be had on this issue.

Telecom is trying to work out how to structurally separate and qualify to get a large piece of the action on the UFB rollout. They don’t want to go down this track without some certainty as to how it will radically change the company.

The government wont give them certainty because there is a tender process underway.

The conundrum, as was pointed out succinctly last week on an InternetNZ blog post is this:

…there is a chicken-and-egg problem on the separation front. Telecom as a vertically integrated firm can’t participate directly in the UFB. But Telecom probably can’t make the economics of separation work unless it has some kind of assurance that its separated network business will be a lead player in the UFB.

Here’s some other views being put out there:

New Zealand needs fibre and we need it soon. We cannot wait much longer to have a comprehensive plan. It’s been almost two years and the government is in a quandary.

That’s not good for NZ, nor for the industry.

It’s not in New Zealand’s interests for Telecom to be run into the ground and excluded from the biggest network build for the next generation (or more).

But it’s not in NZ’s interests for Telecom to be in a position to bully the government or the country into it participating in a way that’s about its own vested interests. New Zealand’s interests are paramount.

There’s all kinds of speculation about what discussions have been occurring with Telecom over the last 19 months.

Tom Puller-Strecker in today’s DomPost is attempting to get to the bottom of this. As usual Joyce is keeping all his cards close to his chest. Does he have something to hide?

There are concerns that the level of private investment available for UFB is not enough to make it work. The government has shifted the goalposts on its tender to allow local fibre companies to provide Layer 2 services as well as Layer 1 on the fibre network.

Layer 1 is the fibre cable in the ground or strung over poles, while Layer 2 lets the supplier add the electronics at both ends of the fibre and means retail providers can use it immediately and supply products to end users.

Essentially this is changing the terms of the tender. The industry seems to welcome it as a sensible move. But there’s a number of issues that lie behind the recasting of the tender which raise more questions.

The small amount of public discussion that is occurring indicates that the debate is shifting to a question of whether $1.5 billion is going to be enough to deliver on the government’s objectives (taking into account the 1:1 private investment). How will reshaping the tender affect this? It doesn’t appear clear to the bidders.

Questions about the role of the Commerce Commission and their ability or otherwise to regulate these networks in the public interest.

And if, as Joyce has said, the government hasn’t ruled out taking an equity stake in Chorus, what would that company look like? And could we end up with an unregulated monopoly that is largely privately owned? Who’s interests will that serve?

Internet NZ’s two concerns are very valid.

They warn against:

  • making policy deals or regulatory deals behind closed doors
  • changes to the current tender process that undermine the efforts people have gone to in making bids

What’s in the way is the closed tender process and the inability for frank public discussion to occur. What does the government think? What does Steven Joyce want?

Whatever happens, we must make this about New Zealand’s interests. And we must make sure that there is an open access network and that real competition can occur.

Telecom needs to state its intentions to the nation. But the government needs to be more upfront. This is public money. And it’s the nation’s network.

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Filed under: broadband, comms & IT, economy, infrastructure
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Time to be a good corporate citizen

Posted by Lianne Dalziel on July 12th, 2009

I have written to ING on behalf of the people who have written to me about the settlement offer which has as its deadline tomorrow despite the fact that the Commerce Commission investigation under the Fair Trading Act into the two funds (DYF & RIF) is a long way from concluding.

I had expected that the government would intervene in this matter as part of their consideration of moratoria however I was advised late last week that this was not going to happen. ANZ has ensured that the release, which people have signed in accepting the ING offer, does not extend to any complaints lodged against them by the end of July with the Banking Ombudsmen. I believe ING should do the same with respect to matters before the Commerce Commission.

If the Commerce Commission investigations show that there has been wrongdoing on the part of ING or any other party covered by the release, then those that sign up to the current offer should not be precluded from benefitting from the results of any prosecution or settlement that might follow such a finding. I believe ING should adjust the terms of the release accordingly. The reason for writing to ING is that I don’t believe ING should be able to essentially get away with its statutory obligations simply through the timing of their offer.

I have advised them that I am fully prepared to develop a private members’ bill in order to ensure that these rights are not taken away from such individuals, and given that many MPs have been receiving similar heart-wrenching letters to the ones I have received, I am sure it would get a fair hearing in Parliament. However I actually don’t want to go down this track because I think it should come from ING and I hope that they step up to the plate tomorrow.

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Filed under: parliament, select committee
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Keep an eye on the Commerce Commission

Posted by Clare Curran on June 24th, 2009

Rodney Hide’s appointment as Associate Minister of Commerce  (responsible for the Commerce Commission) was announced very quietly. Mark Berry’s appointment as Commission Chair received more attention because of his background.

In the telecommunications area of the Commission’s work (which I am spokesperson for) I’ve been paying attention because of the important regulatory reforms driven by the previous Labour Government (and former Minister David Cunliffe). The role of Telecommunications Commissioner has been vacant for more than nine months (because the commissioner Dr Ross Patterson has been on medical leave) and there has been concern consistently expressed to me within the industry about the vacancy given the number of telecommunications issues that require attention. Dr Patterson commands widespread respect and many have been speculating why the position has remained vacant so long. I understand he has fulfilled the terms of his medical leave (and has done for some time) and the question needs to be asked what would be holding up his reappointment? A political reason maybe?

Last week I asked Commerce Minister Simon Power a series of questions in the Commerce Select Committee to try to clear things up. The story only seemed to become more opaque. And today’s NBR takes it further. I think the government has to tell us what’s going on.

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Filed under: comms & IT, regulation, select committee
3 Comments