Ultra fast broadband plans to date are a “very dicey stitch-up job between Telecom, Vodafone and the Ministry of Economic Development,” claims DataLight director Roger de Salis.
He was presenting today at the first day of the finance and expenditure select committee into the Telecommunications Amendment Bill.
“It is complete madness to permit this kind of open slather arrangement,” de Salis says. “The gall is then to give public money to Telecom and Vodafone.”
He describes the proposed 10-year regulatory holiday as completely incomprehensible in a fast-moving world.
Committee member David Cunliffe asked de Salis how convinced he would be that a 10-year regulatory holiday at the wholesale level would not give Telecom a chance to dominate the market within 10 years.
“Completely unconvinced,” was the response.
“The puzzle in a nutshell was that we [de Salis' former company FX Networks, and DataLight, the network operator that is a partner in Taitokerau Networks] have created an open market but other telcos won’t sell you fibre. There’s no way to get into the services required for high-speed.”
Cunliffe raised the option of an equivalence of inputs discipline.
“They would agree then immediately dream up a plan to change the solution,” de Salis says. “The Minister can vary things at any time, and the rules can be changed underneath.
“If this Bill goes ahead, it will reduce or delay investment and New Zealand won’t get the wholesale leap in communications it so desperately needs.”
Vector chief executive Simon Mackenzie told the select committee that the supplementary order paper to the Bill bestows significant market and competitive benefits on Telecom that are not required.
He spoke of regulatory uncertainty and said it was unclear why things were being rushed through.
“The SOP is a free pass for Telecom in terms of competition law.”
Mackenzie says discussions with equity analysts have identified concerns around regulatory uncertainty.
He says there is no requirement under the UFB for Telecom to separate. “Separation is Telecom’s issue, a commercial decision.”
Former TUANZ chairman Chris O’Connell, presenting on behalf of his company Radar Guidance, says the market needs good law and regulation.
He suggests Government itself needs to structurally separate in ICT. “It has four areas that need to be distinctly and separately managed.”
He notes that telecommunications in New Zealand is no longer just Telecom.
“Our approach needs to be integrated not isolated. Farmers want just what people in town want. And they want what people overseas are getting.”
He questions why the SOP was formulated before Telecom had any contract that might require it to structurally separate.
Committee member Shane Jones asked him that if Telecom were not successful in winning UFB, what its future was.
“Telecom has a good future. They still dominate service provision,” O’Connell says.