Cunliffe challenges Key to broadband debate

Communications minister David Cunliffe says National’s $1.5 billion broadband investment plan, announced yesterday, lacks detail and "smacks of opportunism".

He also challenged National Party leader John Key to debate the issue.

“If this is National’s plan, it’s a case of back to the future. 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," Cunliffe said in a statement yesterday.

“National’s plan as presented would inevitably reinforce the position of the incumbent, Telecom, as the dominant fibre provider," he says. "National’s plan involves a Crown capital subsidy against which they would negotiate investment from the incumbent.

“This puts all of National’s eggs in Telecom’s basket and means the incumbent has both them and the market over a barrel in future access pricing negotiations."

National Party Leader John Key yesterday announced a National Government would make the investment to drive the roll-out of a “fibre to the home” fast broadband network in New Zealand. “This investment will help deliver the economic step change that New Zealand needs to significantly lift average incomes over time," said Key.

The National Party also wants to enhance broadband access and speeds for household and premises where fibre to the home is not immediately feasible, he said. Key said independent experts estimated the benefits would be worth between $2.7 billion and $4.4 billion per year.

But Cunliffe says, if enacted, the plan would produce a new monopoly.

“National’s plan replaces a narrow-band monopoly in the nineties with a new broadband monopoly. Why do we think they’ve changed? Neither the market or the public would trust them and that would reduce investment incentives from parties other than Telecom," he says.

Meanwhile, entrepreneur and broadband activist Rod Drury has given Key's plan a preliminary thumbs-up on his blog.

Drury says ot was the first major policy announcment from National, and probably a "good choice of policy areas to start with".

He says it is great so see some vision and leadership and not locking in a particular model for delivery is a good idea at this stage.

"I like the approach of being clear about a number of principles that will guide process towards a solution. The approach acknowledges the need to work with the private sector," he writes.

He also gives kudos to the work the New Zealand Institute on quantifying the public benefit.

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