The bill designed to enable the government's broadband initiatives passed its third and final reading yesterday.
The Telecommunications (TSO, Broadband and Other Matters) Amendment Bill was passed with a majority vote of 65 to 58, with National, the Maori Party, United and three members of the Act party voting in support of the new legislation. Following Royal Assent, the bill is scheduled to come into force on July 1.
ICT Minister Steven Joyce told Parliament that the legislation will usher in a new telecommunications industry structure and that "Telecom as we know it will cease to exist."
That's because in order to become the government's partner in the lion's share of the UFB build Telecom must structurally separate.
Once the bill becomes law, Telecom is expected to issue advice to its shareholders recommending the company split into two separate entities - Chorus, the network infrastructure company that will roll out UFB and RBI, and Telecom Retail, which will become the country's largest Retail Service Provider, as well as own the XT Mobile Network and retain a 50 percent share in Southern Cross Cable.
Joyce says the legislation enables a fibre network build that will be as significant to the country as the reticulation of electricity. He says the UFB will deliver fibre connectivity to schools, hospitals and 90 percent of businesses by 2015 and to three-quarters of all New Zealanders by 2020.
But Labour, the Greens, two Act members, the Progressives and independent Chris Carter voted against the legislation. Labour ICT spokesperson Clare Curran says that if Labour is elected back into government it will "repeal the worst parts of it".
Labour says the bill weakens the historical Kiwishare obligations around free local calling and overseas ownership of Telecom. In addition, it doesn't provide for sufficient Commerce Commission oversight in the early stages of the build, and consumers could end up paying more copper services as they wait up to a decade for the fibre rollout to reach their street.
Curran told Parliament that Joyce had created the network in a "build it and they will come" mindset and had not considered aspects such as how to create compelling content offers that would prompt subscribers to switch from copper to fibre services.
She queried whether the government's UFB would entrench another monopoly - Sky TV.
"Are we going to see a bigger monopoly in the broadcasting sector be given a gold-plated distribution channel into people's homes?" she asked.
Telecommunications Commissioner Ross Patterson earlier announced a study into the drivers of uptake for services delivered over a fibre network.