Tough Telecom regulation surprises everyone

Cunliffe stuns the mullets and silences doubters

The theme running through the reaction to Minister of Communications David Cunliffe’s thorough and tough regulatory package is one of total surprise.

While industry observers widely tipped that some form of regulation was forthcoming, nobody expected Cunliffe’s office to produce such a comprehensive regulatory blueprint as was announced on Wednesday.

Telecom spokesman John Goulter initially denied knowledge of Cunliffe’s announcement and refused to comment. After the announcement, Telecom’s general manager of government and industry relations Bruce Parkes accused the government of turning away from the investment path that would lead to New Zealanders receiving higher broadband speeds and advanced digital services.

Mobile telco Vodafone would not comment. Spokeswoman Sarah Williams declined an interview request, saying “it’s not something we want to comment on”.

IDC telco analyst Chris Loh doesn’t mince his words.

Describing it as the most significant and profound even in the history of telecommunications in New Zealand, Loh says the changes place the country in an unparalled situation. He believes that no other country has such an comprehensive tapestry of regulatory components for the telecommunications industry, which he expcts will lead to a noticeable acceleration of New Zealand’s OECD rankings in that field.

Auckland ISP Orcon is promising $10 per month broadband in two years time.

TelstraClear’s communications manager Mathew Bolland says his company has told it’s Australian owners that New Zealand is no longer “an ugly investment option”. He won’t be drawn on if TelstraClear’s currently shelved investment plans will be dusted off and approved though, saying more time is needed to assess the news.

New Zealand online forums and blogs have been heaving with excitement over the news. It’s a mixed bag of comments though, with scepticism expressed over the efficacy of LLU and the amount of time required to implement the regulatory options, blended with elation that Telecom’s monopoly is finally gone. Rightwing and libertarian posters lament the government “taking away Telecom’s property rights” and demand compensation for the regulation; Kiwiblog commenter Tim Barclay went as far as to say: “The government has done to the Telecom network what Robert Mugabe has done to the farms in Zimbabwe. I will lay a bet that we will not get to the next level of broadband anytime soon, just like Zimbabwe. “

Centre and leftwing posters however firmly support Cunliffe, saying it was about time New Zealand fell in line with the rest of the world when it comes to reining in monopoly telcos.

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