Some improvements welcome but major flaws remain in Telco Bill

The Telecommunications (TSO, Broadband and Other Matters) Amendment Bill was reported back to Parliament by the Finance and Expenditure Committee today. The Committee is recommending some notable small improvements to the Bill, but major flaws remain says InternetNZ Chief Executive Vikram Kumar.

“The biggest problems with this legislation were the imposition of a regulatory holiday preventing the Commerce Commission from doing its job in the fibre environment and Telecom rather than Government leading the structural separation process,” Kumar says.

“Neither of these major flaws have been fixed. The ACT, Greens and Labour MPs on the Committee have set these out as key problems they have with the Bill, and we agree.

“The tragedy is in both cases there were ready fixes available to the Government members, which could have solved the problems both cause. In any case, with Labour promising to overturn the regulatory holiday, its value in providing price certainty for investors is questionable.

“I regret the alternatives suggested were not taken up. The result is that telecommunications legislation is going to remain contentious until at least the full review scheduled for five years from today.

“That is instability the industry simply didn’t want, and didn’t need.

“We do welcome small changes the Committee has made to the Bill. There are bigger penalties for breaches to LFC undertakings; a requirement for the Minister to consult the Commerce Commission for some decisions, and a useful narrowing of the broad power the Minister would have had to spend funds from the Telecommunications Development Levy on almost anything.

“Importantly, the Committee has fixed the definition of Equivalence that will apply to Local Fibre Companies from 2020. It is now clear that an equivalence of inputs standard is required.

“Assuming the Government has the support of the Maori Party, it will be able to push through this legislation in the next few weeks.
“This will be the first time the Telecommunications Act has been amended on a knife edge. InternetNZ regrets that a more durable solution has not been able to be worked out by the Finance and Expenditure Committee

“Overall, this Bill favours Telecom’s shareholders over the wider New Zealand public. It seems that the market has made the same assessment, with Telecom’s share price jumping up.

InternetNZ will analyse the detail of the Bill in coming days and may make further comments if required.

ENDS

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