Labour against proposed changes to Telco Act

Opposition to 10-year 'regulatory holiday' for fibre broadband

Labour will oppose any changes to the Telecommunications Act that would remove regulatory control for broadband pricing from the government’s $1.5 billion Ultra Fast Broadband plan.

The Government has signalled it intends to amend the Telco Act so that the Commerce Commission can’t recommend any regulation of fibre services until 2020. Instead, fibre pricing would be set by the commercial contracts negotiated with Crown Fibre Holdings (CHF).

When the extent of the suspension of regulatory control was made public in July, IDC market analyst Rosemary Spragg told Computerworld that the changes were aimed at driving uptake by retail providers such as telcos. “Ten years without regulation gives certainty to investors. That should bolster the investment case. The industry would like an even longer period.”

However, in a statement opposition ICT spokesperson Clare Curran says Labour is “unconvinced that there is a compelling case to remove normal regulatory control on UFB pricing” and it would revisit any changes made to the Telecommunications Act if it was elected to government.

“Labour has serious concerns that setting a 10-year regulation free period for pricing on our newest piece of major infrastructure, will not serve the best interests of New Zealand consumers or the industry long term. The pace of technology change is very fast. Who knows what the industry will look like in five years time, let alone 10,” she says. “Locking up the industry into a price setting regime with no independent oversight is short sighted and possibly negligent.” Curran told Computerworld that today’s statement is significant in that “this is the first concrete thing that Labour has said what we would or wouldn’t do around broadband.”

She says the statement was released today because CFH is due to announce this month who it will partner with in the UFB. To date it has offered name-preferred partners in three areas – Whangarei, central North Island and Timaru.

“It is mid-October and we are expecting a decision on what the government and what CFH is going to do next, and I guess it was the responsible thing to do for Labour to articulate a position around the regulatory holiday,” she says. “And I guess the other point to make is that there is mounting concern about the lack of transparency in the whole process in the UFB and the parallel process that’s going on with Telecom and structural separation.”

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