Anderton slams privatisation in telecomms

Deputy Prime Minister Jim Anderton has lashed out at New Zealand's telecommunications infrastructure - using it as an example of how privatisation has failed New Zealand.

Deputy Prime Minister Jim Anderton has lashed out at New Zealand’s telecommunications infrastructure - using it as an example of how privatisation has failed New Zealand.

Speaking before the government’s announced bail-out of Air New Zealand, Anderton delivered a speech he was to have given at a Commonwealth Business Forum on the “challenges for infrastructure development: private-public partnerships “. The Forum was to have gathered at the Commonwealth Heads of Government (CHOGM) meeting in Melbourne, but the meeting was cancelled following the terrorist attacks in the US.

“In telecommunications, privatisation brought net disinvestment in technology for most of the 90s,” says Anderton referring to the habit of Telecom’s board to pay out most of its earnings in dividends to its largely US-based owners.

“A near monopoly firm was able to increase consumer prices every year, even when the availability of new technology should have been driving prices down.”

Anderson says internationally New Zealand has been falling behind the rest of the developed world with regard to telecommunications and the price we pay for service.

“International comparisons revealed New Zealanders paying very high sums for line rentals, domestic and international toll calls and mobile services.” He lays the blame for this squarely at the feet of the government and its “light-handed regulatory regime” which led to “poor competitive conditions produced poor investment decisions and unsatisfactory consumer service”.

Anderton also foreshadows the upcoming announcement on broadband initiatives in New Zealand.

“We are piloting broadband schemes in partnership with local communities and telecommunications companies aimed at ensuring all of New Zealand can harness a digital future.” Anderton, who is also minister for economic development, is very concerned about the growing “digital divide”.

“More seriously, the prospect of non-metropolitan areas falling steadily behind in the availability of broadband services threatens the viability of entire regions.” Anderton believes the new legislation, which introduces a regulatory regime tailor-made for New Zealand’s telecommunications market, should turn things around.

The Telecommunications Bill is currently before parliament awaiting its second reading. Minister for telecommunications Paul Swain hopes to have the bill passed into law by Christmas.

The full speech is available here.

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