Telcos and lobby groups unite to protest against UFB terms

'Gang of 11' includes TelstraClear, Vodafone, 2degrees and Federated Farmers

A group of 11 leading telecommunications companies and industry lobby groups have displayed a united front against the Ultrafast Broadband (UFB) plan, which they say will create an unregulated monopoly over the national fibre network.

It will also raise the price of the copper lines on which many individual and organisations will depend on for their communication in the near terms, the objectors say.

The protestors are Vodafone, TelstraClear, CallPlus, Kordia/Orcon, 2 Degrees, Maori rural Broadband Initiative bidder Torotoro Waea and its partner Opto Networks, Federated Farmers, Consumer NZ, InternetNZ and TUANZ.

In a letter to MPs, they emphasise they support the concept of investment in broadband infrastructure. However, “we do not support the proposals as they are set out in this Bill, because they are not a good deal for New Zealand consumers,” say the signatories.

“In its present form, this Bill robs New Zealanders of choice, and traps them into unregulated broadband services with no oversight for 10 years,” the letter says, referring to the period of “regulatory forebearance” in the proposed legislation, which will restrain the power of the Commerce Commission to regulate UFB until the end of 2019.

“In our view the regulatory holiday should be scrapped or substantially modified and the consumers’ champion - the Commerce Commission - should be allowed to do its job,” say the protesting organisations.

The letter distils the objections that many of the organisations voiced during Select Committee hearings last month on the Telecommunications (TSO Broadband and Other Matters) Amendment Bill.

Owing to a rebalancing of the cost of local-loop unbundling between rural and urban regions, the bill will also “increase prices by over 20% for all urban consumers whose broadband is carried over copper telephone lines,” says the letter. “For the next six years the bulk of New Zealand’s voters will be using the existing copper lines for their broadband and the bill makes unnecessary changes to the regulatory regime which is only now starting to bring about a competitive market.”

Federated Farmers “reserves the right to a contrary view” on this point, says a footnote; its members are likely to do better out of the provision than urban customers.

Telecom’s separation into two businesses if it wins some of the UFB contracts will allow it “to create a new wholesale monopoly”, the letter adds. “In our view, there must be more checks and balances on how Telecom separates and the new monopoly that is created.

“We respectfully request that you consider the issues outlined above and seek improvements to the Bill,” the letter to MPs concludes.

Minister Steven Joyce was still in Cabinet when Computerworld called his office, but he is likely to comment on the letter today, his press secretary says.

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