Gareth Hughes

The Chorus copper kerfuffle

by Gareth Hughes

The announcement today of an independent review into Chorus will hopefully provide some answers to the next mess National has created around the roll-out of ultra-fast broadband and how copper pricing is now affecting it. I support Minister Amy Adam’s independent review announcement and believe it is the necessary first step before taking any further action.

New Zealand’s future prosperity lies in a smart green economy, with ultra-fast broadband (UFB) and a thriving ICT sector as a key part of this vision. However, National’s management of the $1.5b taxpayer investment into UFB has been a total mess. The Chorus copper kerfuffle is another on a growing list of National’s disastrous economic management record – think Solid Energy, the floats of Mighty River Power and Meridian, Novopay, and South Canterbury Finance.

The Standard has a good blog on the background to the issue  but even with this looming independent review, a number of important questions remain:

1. Why have Chorus and the National Government been caught on the back foot by the Commerce Commission’s determination to reduce copper broadband costs? This process was well signalled in 2010 and it was the National Government who subsequently wrote the UFB legislation and signed the contract with Chorus in 2011.

2. Why is the price of copper internet services so central to Chorus’ ability to roll out UFB? It’s not a smart way to run an economy by unfairly ‘taxing’ businesses and households through unreasonably high copper prices just to secure the UFB rollout.

3. Has the Minister sought advice as to whether New Zealand would be violating its commitments under the World Trade Organisation’s and General Agreement on Trade in Services which requires an independent regulator for all telecommunications services and measures to prevent telcos from “engaging in anti-competitive cross-subsidisation”?

4. Did Chorus underbid others in the tendering process to get the UFB contract in the hope the Government would ‘ride to the rescue’ when or if something went wrong?

5. Who in Government is going to take responsibility for this monumental stuff-up?

Published in Economy, Work, & Welfare by Gareth Hughes on Thu, November 7th, 2013   

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