COALITION FOR FAIR INTERNET PRICING

MEDIA RELEASE

THURSDAY 3 OCTOBER 2013

Key’s Comments On Copper Tax “an Early Sign of Progress”

The Coalition for Fair Internet Pricing says comments by prime minister John Key that the government will wait for a Commerce Commission ruling before deciding its next step on its proposed copper tax are an early sign of progress.

However it says the Commerce Commission will need to be able to demonstrate its final ruling has been arrived at correctly and free of political interference.

A spokeswoman for the coalition, Sue Chetwin, also chief executive of Consumer NZ, said the group was pleased Mr Key had desisted from claiming copper network monopolist Chorus “could go broke” if the copper tax is not implemented.

“Chorus is a strongly profitable company that paid $95 million in dividends to its shareholders last year,” Ms Chetwin said.

“The company will be profitable with or without the copper tax.

“There is absolutely no evidence Chorus could go broke under any scenario as confirmed by the fact it has made no such disclosure to either the New Zealand or Australian stock exchanges.

“There is also absolutely no threat to Chorus’s ability to meet its contractual obligations to roll-out the government’s Ultra-Fast Broadband (UFB) initiative, whatever recommendation the Commerce Commission makes about the pricing of copper broadband and voice services.

“The prime minister’s comments are an early sign of progress that the government may leave the setting of monopoly prices to independent regulators. They underscore our campaign's call to put everyday Kiwis first.

“For its part, the Commerce Commission must follow robust and transparent processes. As long as it is able to demonstrate it has not been influenced by political pressure, and has correctly followed the required processes, we are hopeful this matter can be resolved in a way that benefits all users of telecommunications services in New Zealand.”

Ms Chetwin called on the government to withdraw its recent Discussion Document and discontinue its parallel ministerial consultation process on copper pricing.

The Coalition for Fair Internet Pricing was founded by Consumer NZ, InternetNZ, and the Telecommunication Users Association of New Zealand (TUANZ) and is supported by CallPlus and Slingshot, the Federation of Maori Authorities, Greypower, Hautaki Trust, KiwiBlog, KLR Holdings, National Urban Maori Authorities, New Zealand Union of Students’ Associations, Orcon, Rural Women, Te Huarahi Tika Trust and the Unite Union.

The government’s proposed copper tax has been conservatively estimated to cost Kiwi households and businesses between $390 million and $449 million between 1 January 2015 and 31 December 2019. The latest demands by Chorus would take this cost to Kiwi households and businesses to $979 million.

ENDS

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