Labour's Marian Hobbs will probe circumstances surrounding communications Minister Maurice Williamson's visit to US company Formus Communications, regardless of whether any action is taken by the government.
Hobbs, who is Labour's communications spokeswoman, last week called on Prime minister Jenny Shipley to investigate the matter.
Williamson visited Denver-based Formus last year, one month before the government decided to include high-bandwidth radio spectrum in a Ministry of Commerce auction. Williamson's office has denied any link between his visit and the inclusion of the bandwidth in the February auction in which the telecommunications company bought five of the six lots for $2.6 million, averaging $510,000 per lot. Clear Communications successfully bid $800,000 for the remaining lot.
Hobbs says she has made an official request to find out what cabinet discussion was held, what advice the minister took and what factors affected the decision to include the 26-28GHz radio spectrum. At the time the decision was announced, local telecommunications companies objected, saying it left them with no time to prepare bidding strategies or business plans.
"The Ministry of Commerce says the decision was in response to market pressure. I want to know whether there was market pressure from any other place [other than Formus]," says Hobbs.
"I'm trying to find out the background to the decision, a time-line leading up to the auction, who was consulted, what were the market forces the minister considered in making this decision. It looks like the minister was faced with the excitement of one particular group and didn't take into consideration that other people in the market place would be interested, thus making it very difficult for them to put in a decent offer."
Meanwhile, Denver-based Formus has announced it will start trials of its high-bandwidth voice, video and data services in Auckland by the end of the year.