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.