22 NOVEMBER 2013

Copper Tax Would Worsen “Digital Divide”

This week’s World Internet Project report backs up evidence the proposed copper tax would worsen the ‘digital divide’ that already means poor, elderly, Maori, Pacific and rural New Zealanders have inferior access to online services, the Coalition for Fair Internet Pricing said today.

The report, by AUT University, shows this ‘digital divide’ means disadvantaged groups are able to make much less use of core services offered online than other Kiwis. The same groups are also much less likely to have access to the government’s ultra-fast broadband (UFB) project, when it becomes available to about three-quarters of New Zealanders around 2020.

A quarter of New Zealanders will never have access to UFB and will instead continue to rely on the existing copper network for broadband and voice services.

Despite this, a Ministry of Business, Innovation and Employment (MBIE) Discussion Document proposed in August that all New Zealanders – including the 25% who will never have access to UFB – should be forced to pay the same price for slower copper services as will be charged for faster UFB services. The price would be significantly above that which the independent regulator, the Commerce Commission, says is fair.

“It would be profoundly inequitable to force poor, elderly, Maori, Pacific and rural New Zealanders – or indeed any Kiwi household or business – to pay for a UFB service they will never have access to, especially as we know these groups are disadvantaged by the ‘digital divide’,” a spokeswomen for the Coalition, Sue Chetwin, also chief executive of Consumer NZ, said today.

“People on the UFB network should pay the fair UFB price and people on the copper network should pay the fair copper price – and nobody should be forced to pay a copper tax for a service they don’t use or may never even have access to.”

Ms Chetwin said the good news is that in recent weeks Communications and IT Minister Amy Adams has begun distancing the Government from MBIE’s copper tax proposal.

“The Minister’s independent Ernst & Young Australia review of the financial position of Chorus Ltd, which is building much of the UFB network, includes detailed analysis of how changes to its operational costs, capital costs, debt facilities and dividend policies could ensure it is able to complete the UFB project to contract, without the need for the unfair, inequitable and totally unacceptable copper tax. We are very much looking forward to reading the independent review report, and all relevant background information, as another nail in the coffin of the MBIE copper tax proposal.”

ENDS

© Scoop Media