Research firm, IDC, and telecommunications user group, TUANZ, have come out on opposite sides of the debate over the government’s proposed copper-based broadband pricing.
IDC backs ICT Minister Amy Adams’ discussion document released last week that prices copper-based services at a level closer to the Ultra-Fast Broadband’s fibre offerings than proposed by the Commerce Commission in a draft determination last December.
IDC research manager, Peter Wise, said the UFB roll-out could flop if broadband over copper is so cheap that subscribers don’t migrate to fibre. He says under the government’s proposal, copper-based services would be marginally cheaper without jeopardising the taxpayer’s $1.35 billion investment in UFB.
However, TUANZ chief executive, Paul Brislen, sees the government proposal as undermining the telco commissioner. “In effect, the minister will be setting the price of service directly,” Brislen blogged, describing Adams’ top-up for copper network owner Chorus as a tax.
“Not only is the government the investor in the [fibre] network, it has now taken over as regulator and that’s an appalling position for the industry to be in.”
Wise concedes that it’s not ideal that the government be setting pricing but says what the discussion document does is “reset” the industry rules for a fibre world.
“What the Commerce Commission does is implement the rules and the rules aren’t working for this circumstance. If you take the position that the fibre network is a long-term investment that will have economic benefits, how do you make it work?,"he said.
“A reset, by aligning copper and fibre prices on a transparent basis and then allowing the Commerce Commission to operate the new model, is common sense to me.”
But TUANZ’s Brislen is calling for Adams’ proposal to be rejected.
“We now face a monumental struggle to ensure the Chorus tax is repealed, that the government reinstate the Telecommunications Commissioner as the regulator and that the Beehive stops introducing more uncertainty into this sector.”
Submissions on the minister’s discussion document are open until September 13.