Negotiations between the government and Telecom/Vodafone over the Rural Broadband Initiative have met a speed bump following Telecom’s request for a fifth variation to its operational separation undertakings. “Taking the opportunity to consult with industry on non-discrimination requirements has meant a small delay. However, the Minister (Steven Joyce) still expects a decision to be made in the next few weeks,” says spokeperson Anita Ferguson in an email. ICT Minister Steven Joyce originally said if there was no contract signed by March 31 he would look at the re-tendering. But Ferguson says the government is satisfied that good progress is being made on RBI negotiations. Submissions on the fifth variation request close on Tuesday April 5. Telecom has asked that the Undertakings be amended to ensure that the provision of subsidised services under the RBI will not be a breach of the non-discrimination rules.Telecom wants to ensure that if it offers the same services to customers without using RBI infrastructure it doesn’t have to be bound by RBI pricing and obligations. A fact sheet ‘Key Points on Telecom/Vodafone’ on the MED’s website states “no changes to telecommunications regulatory required.” But the Ferguson says that the request for a fifth variation to the undertakings was been identified following the initial decision to choose Telecom/Vodafone as the priority bidder.
“As negotiations on the RBI have progressed, Telecom has identified the issue raised in its Variation as one that would be useful to clarify. The Minister is currently consulting on the Variation, and intends to progress his review and decision quickly." Computerworld was told that the MED will review any submissions it receives on the fifth variation. It appears that the fifth variation request has the backing of user groups. TUANZ supports the change to the undertakings and InternetNZ CEO Vikram Kumar says that on the face of it the request looks fine, but the organisation will have to analyse the documents before making a definitive statement.
Update: Labour Communications and Information Technology spokesperson Clare Curran has responded with this statement:
"Labour is calling on the Government to review and re-tender the rural broadband initiative in light of industry concerns, Labour'sCommunications and IT spokesperson Clare Curran said today.
"Increasing speculation about monopoly pricing and a lack of competition to provide rural New Zealanders with a real choice of servicesprovides a sound argument for a review.
"Steven Joyce has missed his own deadline for signing contracts with Telecom and Vodafone by the end of this quarter. In his media release on 7 February 2011, he reserved the right to re-tender the contract. Labour suggests he do so.
"Telecom's latest attempt to extract further concessions from its sweetheart deal with the Government to deliver broadband to rural New Zealand looks likely to entrench its monopoly and starve rural New Zealand of competitive prices and choice in broadband services.
" Telecom's request this week for a fifth variation to its operational separation undertakings demonstrates how complicated theGovernment's broadband scheme is and how the Minister has not thought it through.
" It essentially means that if the variation is granted, where Telecom has existing fibre in rural New Zealand, it will not be covered under the new rural broadband scheme allowing Telecom to attract the most customers and extract monopoly rent from any retail providers.
" Telecom and Vodafone as joint partners in rural fibre will therefore be ideally placed to provide comprehensive retail services across rural New Zealand largely at the prices they want. This means less competition and less choice for New Zealand consumers and contradicts the intentions of the Government's supposed high speed new fibre network.
" The Minister's own departmental website states quite clearly that there would be no changes required as a result of the rural broadband scheme. And yet we have Telecom demanding yet another regulatory concession.
" Steven Joyce and his department are flying blind on this scheme. New Zealanders will lose out if they end up with higher prices and less choice from a scheme that cements a duopoly between Telecom and Vodafone to deliver broadband services," Clare Curran said.