Group seeks changes to proposed telecommunications law

Thursday 24th March 2011

Consumer groups are calling for changes to proposed telecommunications legislation, which they say will lead to higher broadband prices and less choice.

Consumer NZ, Federated Farmers, Tuanz and InternetNZ today published a joint supplementary submission they have made to Parliament's finance and expenditure committee.

Its 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, the organisations said.

The suggestions showed how broadband infrastructure could be regulated in the public interest.

Consumer NZ chief executive Sue Chetwin said it was vital New Zealand broadband customers did not lose huge gains seen since competition was introduced on Telecom's network in 2006 - but the legislation would bring that to an end.

InternetNZ chief executive Vikram Kumar said customers were being asked to pay higher prices for broadband today to pay for the promise of ultra fast broadband in the future.

"This bill will lead to higher prices for most urban customers and reduced choice while we wait for the future to arrive," Kumar said.

"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."

Tuanz chief executive Paul Brislen said the bill proposed sidelining the regulator.

Federated Farmers chief executive Conor English said the legislation exempted specific bidders in the Rural Broadband Initiative from restrictive trade practices which were specified in the Commerce Act.

Any exemption from the Commerce Act raised the issue of consumers being able to get a fair deal, and redress if they did not, Mr English said.

"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."

NZPA

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