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Topic # 81307 11-Apr-2011 14:52 Send private message

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Eleven Telcos, Consumer Groups Unite Against UFB Bill

In an unprecedented move, 11 of New Zealand’s major telecommunications companies and the country’s leading consumer advocate groups have united to oppose the Government’s proposed UFB Bill.
The group, including Vodafone, 2 Degrees, TelstraClear, Call Plus,  Kordia/Orcon, Opto Network and Torotoro Waea as well as , Federated Farmers, Consumer New Zealand, TUANZ, and InternetNZ, have sent a joint letter to all MPs outlining their concerns with UFB initiatives in the proposed Telecommunications (TSO, Broadband, and Other Matters) Amendment Bill.

TUANZ Chief Executive, Paul Brislen, says while the group fully supports broadband infrastructure investment, the letter outlines the group’s fears that the Bill would reduce competition and investment in New Zealand’s telecommunications market.

“Chief among our concerns are the Bill’s proposals to give successful fibre company bidders a ten year ‘holiday’ from regulation, and the removal from the consumer watchdog Commerce Commission of any oversight of prices and services until 2020..

“In our view the regulatory holiday should be scrapped or at the least substantially modified, and the consumers’ champion - the Commerce Commission - should be allowed to do its job,”  says Brislen.

Prices were also likely to increase by over 20% for all urban consumers whose broadband was carried over copper telephone lines.

The Bill would also allow Telecom to create a new, wholesale monopoly when it was separated into two businesses,  says Brislen.

“In our view, there must be more checks and balances on how Telecom separates and the new monopoly that is created,” he says.

While consumer groups and the broader industry agree the Bill needed to be improved, papers obtained under the Official Information Act reveal the Commerce Commission also agrees advising that ‘substantial risks to competition’ exist.

Statements  by Communications and Information Technology Minister, Steven Joyce, that no monopoly will  be created, that a ‘regulatory holiday’ is necessary, and contracts between Crown Fibre Holdings and successful fibre company bidders will  protect consumers are  not reassuring.

There is nothing in the legislation to prevent fibre companies from increasing prices and degrading services, and regulatory holidays are  banned in the European Union and by the WTO, Brislen says.

“If there is no issue, why deliberately legislate to prevent the Commerce Commission from doing its job?”, he asks.






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  Reply # 457617 11-Apr-2011 21:04 Send private message

Guess it depends whether you think the ComCom has done a good job regulating the industry this far.

If you ask Telecom they will say they have done a poor job and destroyed huge amounts of shareholder value overnight in some decisions.

If you ask customers they will say the ComCom hasn't done enough to increase competition and lower prices (domestic peering, sub loop unbundling, handover link dimensioning etc).

You could say they've walked the line and done a balanced job.. but given both outcomes are net negative you could say they fence sat and made things worse.

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  Reply # 457866 12-Apr-2011 15:15 Send private message

The question is pretty simple about the ComCom, Given the LFC's will be setup with contracts from CFH does the ComCom really need to be involved since CFH is already setting the terms? Is there a point to having the LFC's affected by two government entities




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