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Consumer groups combine to call for Telco law changes
Media Release – Thursday 24 March 2011

The Chief Executives of four consumer groups have today released a joint supplementary submission to Parliament’s Finance and Expenditure Committee, making a joint call for changes to the telecommunications legislation it is currently considering.

Consumer NZ, Federated Farmers, TUANZ and InternetNZ are all backing the amendments, which seek to put consumer interests first in the future of New Zealand’s telecommunications markets.

“We listened to Steven Joyce on Monday morning when he said he was most concerned with consumers. So are we,” says Consumer NZ Chief Executive Sue Chetwin.

“It is vital that we don’t lose the huge gains that Kiwi broadband customers have seen since competition was introduced on Telecom’s network in 2006 – but that is what the current legislation would bring to an end,” she says.

InternetNZ Chief Executive Vikram Kumar agrees: “To pay for the promise of ultra fast broadband in the future, Kiwis are being asked to pay higher prices for broadband today. This bill will lead to higher prices for most urban customers and reduced choice while we wait for the future to arrive.”

“Worse, we will continue to pay higher prices. It is simply impossible to know today what the right prices are over a ten year period for something that changes as quickly as the Internet and technology. The Government promises good prices for ultra fast broadband on day one, but setting prices for ten years may mean that while the rest of the world is benefitting from falling prices, our prices either rise or decline much more slowly,” he says.

Paul Brislen, CEO of TUANZ focused on the call for transparency and the issue of the proposed regulatory forbearance period: “If you want regulatory certainty you involve the regulator from the outset. If you want a regulatory holiday, you sideline the regulator and unfortunately that's what this bill proposes.”

Conor English, CEO of Federated Farmers, says: "our desired outcomes have always been to have the highest speeds possible (up and down), to as many people as possible, as efficiently as possible, as cheaply as possible and on an on-going basis. This legislation exempts specific bidders in the Rural Broadband Initiative from restrictive trade practices which are specified in the Commerce Act. Any exemption from the Commerce Act raises the issue of consumers being able to get a fair deal, and redress if they don't.

"Careful and robust competition law scrutiny is vital. The sections of this legislation that give that exemption need to either go, or be substantially tightened up, so that whomever wins the RBI has to comply with competition law once the tender is over, and scope for unintended consequences is eliminated."

The proposals the four groups have consolidated draw on their detailed submissions lodged with the Committee on 11 March, and follow the truncated process for public hearings last week.

The focus is on protecting competition in the copper market, improving the fibre regulatory framework, making Telecom’s structural separation work in the public interest, and removing Commerce Act exemptions for the big telco players.

“Consumers are the ultimate users of this broadband infrastructure. It has to be regulated in the public interest – and our suggestions show how this can be done,” the Chief Executives said.