Labour would cancel Crown fibre contracts without compensation

Don Brash

A future Labour government could rewrite Telecom’s ultrafast broadband (UFB) contract, without paying compensation, Act leader Don Brash said today.

Mr Mallard , and Labour communications spokeswoman Clare Curran, both vehemently opposed the Telecommunications Amendment Bill during its committee-stage debate last week – a session most notable for last-minute changes that allowed for the foreign sale of Telecom’s retail business.

During the committee-stage debate on the new UFB legislation, Labour also tabled an amendment that would have increased the fines that Telecom might have to pay for breaching separation or "line of business" requirements in the bill from $10 million to $100 million.

"Anyone entering into an arrangement based on this legislation has got to know that it may not last,” Mr Mallard added.

A constant theme of Labour's attacks on the bill has been that Telecom has behaved badly in the past (including a recent $12 million fine for manipulating the wholesale price of business broadband services between 2001 and 2004), so need to be put under close tabs during the UFB project. The party sees regulatory oversight weakened under the Telecommunications Amendment Bill.

“This is wanton economic thuggery,” said Dr Brash.  “Whatever the merits or demerits of the bill – and there are two ACT MPs opposed to it – when and if it is passed it will become law.  The relevant businesses should be entitled to expect it to be honoured and to proceed on the basis of it, free from the spectre of having the rug pulled from under them by political caprice and retrospective vandalism.

“How does Mr Mallard expect investors in any area of the economy to engage in business if the rules under which they do so are to be so blatantly subject to his whim? 

“The threats about retroactive increases in fines for breaches of requirements are especially insidious.  Mr Mallard may just as well have erected a sign at Wellington airport saying, ‘Invest here at your peril. If we get in, all bets are off.’

Although Act seems united in its derision of Mr Mallard, the party has been at sixes and sevens over the Telecommunications Amendment Bill.

All Act MPs voted for the first reading, but two of the five (Sir Roger Douglas and Heather Roy) peeled off to oppose the legislation at its second reading (see full voting break-down here).

The committee-stage was ahead of the bill’s third and final reading.

Telecom shares (NZX: TEL) were up 0.63% to $2.395 in early afternoon trading. The NZX50 was up 0.42%.

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7 Comments & Questions

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Seems like a case of the pot calling the kettle black!

As if Labour are now some white knight in shining armour - defenders of morals and anything illegal.

Labour should not be allowed to comment on anything illegal or highly questionable until after they pay back the $900,000 they owe to the tax payer for attempting to rig /steal the last election, where they needed to go back and retrospectively change the law to aviod prosecuting itself.

Has any of that money ever been paid back to the tax payer?

Labour are just jealous a "profit making" entity can get away with behaviour they can't - when it is them in fact making the laws!

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Mallard should pack his bags...he is incompetent and nothing more than an overgrown student

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Mallard = lame duck!

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Mallard is absolutely right, Telecom has behaved badly and it's a shame Brash can't see it because behaving badly is something Brash knows all about - just ask his wife, or the Brethren
Telecom's contract should be gbl.

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Clare Curran is an anti West Fabian Frankfurt School stooge.

Under LieBore the erosion of the basis of a free society - Property Ownership and Contract - will be further eroded.

Socialism is the handmaiden to communism....there is not one country where it has been successfully applied...EVER.

Socialism...150 Million deaths and counting.

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Remember, its not just Telecom funds at risk here. contracts covering over a quarter of the country's population have been earmarked or let already to non-Telecom providers (Northpower, Enable, Central North Island Fibre Consortium, Alpine Energy)

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Easy solution - don't vote Labour - EVER!

Problem solved!

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