"The Government's decision to kowtow to Telecom is gutless and will be revisited by a Labour Government," Labour commerce spokesperson Paul Swain said today.

The Government has given the green light to plans by Telecom to require households to use an 0867 number to access the Internet or pay a two cents a minute charge after the first 10 hours of Internet use per month.

"Basically the Government is allowing Telecom to use its dominant market position to unilaterally decide the terms of Internet connection in New Zealand. Telecom can expect a much tougher attitude from Labour," Mr Swain said.

"Labour believes the Internet is integral to the knowledge economy and will not tolerate any roadblocks to Internet use.

"This reinforces our determination to launch a full inquiry into the telecommunications industry within six months of the election. One of the terms of reference will be to recommend to the Government a regulatory regime to secure fairer competition and a better deal for the consumer," Mr Swain said.

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