Labour communications spokesperson Clare Curran says Prime Minister John Key has been caught out making misleading statements on Chorus. Yesterday Key told the NBR no-one anticipated the magnitude of the cut in the regulated price the company could charge for access to the copper broadband network.
Curran says that on November 6 Key said: “There were many, many analysts who looked at the situation as a result of the legislation that was brought in, and in fact, at the contract that Chorus signed, and not one analyst actually noted that there was a significant likelihood that there would be such a dramatic decrease in the copper price.”
However Curran remembered otherwise. She says : “A Goldman Sachs report from November 2011 reveals that at least one financial analyst predicted the wholesale price of copper would fall and provided an estimate for smaller Telcos of $8.47 per month which was significantly less than the final price of $10.92 a month announced by the Commerce Commission.”
Curran says: “For the government to now claim ‘no-one knew it was going to be that low’ is simply wrong.”
This squares with my memory reporting events at that time for CommsDay. Telecom NZ completed the Chorus demerger on December 1, 2011. Before that date there was plenty of open discussion about the likelihood of large cuts to the copper access price.
Comment: Chorus, the company’s shareholders, Amy Adams, Crown Fibre Holdings and everyone else with responsibility for building the ultra fast broadband network must wince every time the Prime Minister opens his mouth on the subject.
His earlier comments on the likelihood of Chorus going bankrupt meant the company had to leap into a distracting damage control exercise at a difficult point in the whole UFB discussion cycle. More recent comments bending the truth only serve to dig deeper holes.
Key has added nothing constructive to the debate and has served only to make things worse at every stage. If anything the greatest damage is to his own reputation, until he got involved in the UFB debate Key looked competent, informed and in control.
Add to that the impression of corporate cronyism and we’re starting to see cracks appear the government’s hitherto carefully managed image. Don’t think this won’t all be dragged up again next year in the run up to the election. Key has handed Labour a powerful stick to beat him with.